Business Intangibles - culture, loyalty, innovation and reputation

ChipConley, the founder and ex-CEO of JoieDeVivre hotels hosted the Enlightened Business Summit this week.  One key theme amongst the talks is the importance of business intangibles such as Culture, Loyalty from customers and employees, Ability to innovate, and Reputation.  These intangibles are key indicators of sustainable business success, but ironically not measured in today's balance sheet.    To improve we must measure, thus establishing metrics for all important intangibles is an imperative of a sustainable leader.  A good place to start is loyalty from customers and employees, an example metric for this include retention rates.  Ability to innovate is also well mapped by innovating organizations such as IDEO and Apple.  Reputation is possible to gauge by marketing experts.  And organizational change experts can help measure the positivity of company culture.  Digging into the messy areas of intangibles is important for sustained success, and the organization will benefit simply from taking that journey.

Monday morning decompression

I'm exhausted.  After four frenzied days of lectures, presentations, club meetings, inspiring speakers and intense socializing, I'm ready for some R&R.  The upside of Presidio is their residency format, allowing me time outside of the classroom to pursue interesting projects.  The downside is yesterday, the last day of four intense days. I'm currently taking Monday morning off to decompress, and I'm watching TED talk by Chip Conley: measuring what makes life worthwhile.  Bhutan's BNH, which he describes in the video, is a concept we learned during our first year at Presidio.  It's motivating to watch him expertly present the concept to an influential audience.

A Learning Company is a Sustainable Company, Tips for Fostering Informal Learning

Learning keeps a company ahead of its competition, which is essential for survival.  Fostering learning in the workplace can be tricky, especially since the most important learning are often informal and difficult to establish and track.  Nonetheless, it is possible to take formal steps to foster informal learning.  I would like to share my examples of informal learning from Cypress Semiconductor, where I worked for 3 years.

Fostering Informal Learning by Fostering Relationships
Cypress has excellent formal and informal learning opportunities.  To start, it an excellent new-hire training program for new grads, where the new grad goes through a 6-month rotation with various departments that he/she will be interfacing with as a Product Marketing Engineer (PME).  This program is extremely successful at building a web of relationship and skills that the new hire can leverage in the new job.  Cypress also matches new hires with mentors, a program I find very successful at informal learning.  Since Cypress hires engineers to do the PME job, which is essentially a marketing job, everyone is learning on the job.  So the PME culture emphasizes sharing of on-the-job lessons.  The job also rotates often.  Each PME is in assigned a few product lines and a geographic region.  This assignment changes roughly every six months.  I'm not sure whether this was by design or as a reaction to higher organizational changes, but it facilitated a lot of cross-functional learning.  I believe informal learning is built upon a web of relationships.  Cypress enabled and fostered these relationships extremely well.  One year at Cypress exposed me to more people inside and outside of Cypress than two years at my most recent company. As a result, I have a massive list of talent that I can call upon to exercise informal learning.  

Teaching as a Learning Opportunity
A side effect of the assignment rotation meant not only do I continuously consult my predecessors about my new responsibilities, I also have to train the person taking over my job.  The opportunity to teach is itself a learning opportunity.  The teaching experience helps me articulate what I know, understand how I learn, and streamline my learning ability.  In teaching I also learn about the student, further fostering informal learning enlarging the relationship web.

Continuous Learning
The brain is a muscle that needs exercising.  New information and learning both related and unrelated to the job is beneficial to keep this muscle active.  While grad school keeps my brain very busy with learning, the work place is significantly less stimulating.  Thus it becomes easy to fall into a routine and stop thinking or learning.  Cypress University, an internal learning organization, partners with outside educators to offer classes to employees.  On campus classes range from leadership, organizational management, marketing, to language classes such as Japanese and Spanish.  Employees can take any class upon approval by their manager and Cypress covers the cost.  This opportunity allows employees to continuously exercise their brain and stay creative.  Although unrelated to my job, I took Japanese classes to break the routine and keep my interest.  The exercise translated to higher interest in my job, not to mention relationships built with fellow employees in the Cypress-only classroom.

Companies stand to gain an edge of competitors by fostering informal learning.  What have your organizations done to foster informal learning?

Residencies at Presidio

Presidio Graduate School operates on a residency system.  Instead of the regular school schedule of classes every single week, we get together once a month for an intensive, conference style, learning extravaganza.  Students and faculty fly in from other parts of the country, and we spend all days and evenings together to take lectures, make presentations and collaborate on teamwork.

Since I am on the full time track, I take 4 classes per semester.  Each semester consists of 5 residencies (5 months).  This week I am attending my third residency.

CEO Interview Collection from Going Green 2010

Last week I attended Going Green 2010, a San Francisco conference connecting GreenTech startups with venture capital.   I interviewed 10 interesting GreenTech startups there and posted them at TriplePundit.  In the last few days, some of published interviews are cross posted here.  But perhaps it's easier to share a link that captures all of them.  Here is the full collection of interviews at TriplePundit.

Video Interview: Tony Zhang of OnGreen.com on Accelerating GreenTech Investments

My article originally appeared on TriplePundit

Finding investors can be particularly challenging for GreenTech entrepreneurs because investors are unfamiliar with the concept.  At the recent Going Green 2010 conference, I ran into many investors who were there to “check it out” for their clients who were interested in GreenTech but did not know how to invest.  This video with Tony Zhang about his company On Green explains how their online platform for uniting GreenTech entrepreneurs with venture capital and start up services could accelerate the development of GreenTech.   For the GreenTech wary investor, On Green also provides a technical vetting service by an expert panel from universities around the world.  The idea is to reduce ambiguity, educate the investment community and stimulate more funding to green technologies.  On Green has 6000 users working on 260 deals with entrepreneurs looking for up to $50 million in funding.  Fifty percent of the entrepreneurs using the site who responded to a survey stated that they were contacted by potential investors.  Entrepreneurs who spend time on the road looking for investors are spending less time on making change with green technology.  So an online platform provides a fast an efficient way to find the funding necessary and advance the proliferation of GreenTech.

Interview with Tony Zhang of On Green from Connie Kwan on Vimeo.

Video Interview: Paul Steinberg of Avego talks about the Future of Transport

My article that originally appeared on TriplePundit

Millions of empty seats travel around the country on a daily basis – an incredible waste of increasingly valuable energy resources.  What if we could fill those seats and take other cars off the road?  At Going Green 2010 this week, I found a communication platform that can help fill those seats.  This video with Paul Steinberg of Avego profiles their platform for enabling next generation efficient transport.  The combination of transit and private cars is brutally inefficient.  The mass transit system is truncated.  A short 20 min journey by car may involve a much longer multi-leg journey on mass transit.  Mass transit during non-peak hours is expensive to operate but necessary due to lack of alternatives.  Meanwhile, private car ownership is expensive, and does not travel efficiently during peak hours.  Imagine a solution that provides real-time passenger information and real-time location of empty seats traveling in the right direction.  It would become a platform for marrying all modes of transportation into one seamless and efficient whole.  That is what Avego has set out to do.  With thousands of users 63 countries, Avego is already influencing the way people travel.

To enhance trust, Avego allows user ranking of each other, and provides a 4 digit code for matched riders to find each other securely.  On the incentives front, the Seattle Department of Transportation is spending half a million dollars in extra incentives such as gas cards and cash rebates to motivate passengers to choose empty seats in other private cars or on mass transit over their own vehicle.  The incentives will last six months, after which the department believes the new habit will take hold.  Drivers will continue to receive the established price of $0.20/mile per empty seat.  Santa Barbara and the San Francisco Bay area are poised to follow suit with the Metropolitan Transport Commission putting up $1.5 Million dollars for a similar program.
Transportation constitutes roughly 30% of US energy usage.  The fastest and most effective method for reducing this energy use is by becoming more efficient in the use of our existing system.  Companies like Avego are providing the catalyst for change.  Will people join?

Interview with Paul Steinberg of Avego from Connie Kwan on Vimeo.

Video Interview: Arthur Chait of EOPlex Talks About Green Semiconductor Packaging

My article originally posted on TriplePundit

Electronics are here to stay.  Unfortunately, so is E-waste, and it’s only going to increase in the coming years. The separation of E-waste into useful materials continues to be a challenge.  The best way to reduce is, of course, is to put less into electronics to begin with.  The following interview from Going Green Silicon Valley with Arthur Chait, the CEO of EOPlex, profiles his new semiconductor package that promises to deliver lower waste and lower cost.   Traditional semiconductor packaging is made with etching and plating which involves polluting chemicals that can enter our water systems.  EOPlex offers a solution that eliminates the need for etching and plating and their associated chemicals, delivers thinner packaging with more leads and lowers total cost of ownership.   No new equipment is necessary to adopt this greener solution, accelerating potential rate of adoption.  What we need now is a collection of more green alternatives for the semiconductor industry to support our electronics need without destroying our environment.  Do you know of some? Watch the video below…

Interview with Arthur Chait of EOPlex from Connie Kwan on Vimeo.

Calculating Costs of Product Schedule Delays

For our third semester Products and Services class with Dariush Rafinejad, we are reading his book : Innovation, Product Development and Commercialization.  

Chapter 3 covers Marketing Management, arguably the most important aspect of successful product development.  Taking examples from his experience in semiconductor equipment manufacturing, Rafinejad writes about the importance of the whole product.   Successful firms provide an ecosystem of products and services to the customer.  When the customer pays for the purchase, the journey ends for the sales force, but the journey is merely beginning for the customer.  (Rafinejad, 2007) The customer takes tremendous risk in a purchase, thus, lowering that risk is instrumental to closing a sale.   One way to lower that risk is by establishing a whole product offering that includes not just presale and sales support, but a comprehensive post-sale infrastructure including product install, support, performance guarantees and related services.  

In addition to the whole product, product planning is crucial.  Rafinejad comprehensively discussed various components of planning such as marketing research and analysis methods, product adoption curve, pricing theory and product roadmap.   He noted the interesting face that project delays are often more costly than increased development costs.  However, his short example left me wanting more.  Thus, I did further research led by the question “How does one calculate the cost of a schedule delay?”  
The question falls under the category of Project Management, and many books are available to help answer the question.  The Lean Product Development Guidebook suggests three regions of different schedule sensitivity that looks very similar to a product adoption curve.  Region A products enjoy monopoly in the market space, and thus have high schedule sensitivity.  Region B products with many competitors have lower schedule pressure.  And Region C products have the lowest sensitivity.  (Mascitelli, 2006)

(Mascitelli, 2006)

Upon deciding on the region of sensitivity, it is time to calculate the NPV of a delayed project.  There are three factors to consider in the calculation.  The first is the higher burn rate.  A delayed project usually comes with added worker time on the project, thus worker salaries and other costs contributing to the burn rate must be included in the NPVdelay calculation.  The second factor is the delay impact on product price in the market.  If the product is trying to capture first move advantage, the cost of delay can be significant.  The penalty is also significant for missing a market milestone such as an important tradeshow, or the buyer’s buying window.  The third factor is lifetime sales volume impact from the delay.  The table below shows typically impact on various product types from schedule delays.

(Mascitelli, 2006)

A schedule delay is usually caused by avoidable risks, and it is useful to map out the hidden risks prior to project initiation.  I find the following graph a useful way to visualize each risk and its impact.

(Kendrick, 2009)   

An important part of product development is product planning.  Performing adequate market assessments and careful risk analysis helps ensure a robust and successful product.

Kendrick, T. (2009). Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Project. AMACOM Div American Mgmt Assn.
Mascitelli, R. (2006). The Lean Product Development Guidebook: Everything Your Design Team Needs to Improve Efficiency and Slash Time-to-Market. Technology Perspectives.
Rafinejad, D. (2007). Innovation, Product Development and Commercialization: Case Studies and Key Practices for Market Leadership. J. Ross Publishing.

Coming very soon: the spaceship console

I've always wanted to have a spaceship style information console with the nice female machine voice.  Now I can have it! Qwiki is a start-up working on quick audio-visual presentations for any topic.  A brilliant solution for the unsustainable information overload we are experiencing.