Monthly Archives: January 2016

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Preserving Core Competencies: At GE, Everything Old is New Again

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A few weeks ago, this blog looked at Kodak’s counterintuitive entry at the Consumer Electronics Show, featuring its return to the Super8 movie camera. Film, really? Yes. Kodak represents a perfect case for retaining your core competencies because you just never know when film will make a comeback.

Today, an article in strategy+business makes a similar point as it traces GE’s headquarters move to tech hub Boston from its former home at 30Rock in Manhattan. GE had planted its headquarters in Manhattan due to its acquisition of NBC Universal and the growth of its financial division, GE Capital.

The strategy+business article  makes the point that GE’s pivot to Boston is responding to two things:

  1. a change in focus and
  2. a change in the workforce.

The new technology workforce it wants to attract are centered in hubs like Boston, and the young engineers and researchers want to live an Uber-friendly urban lifestyle. The article summarizes this point in its last two sentences where it describes a GE advertisement:

Owen, a young, skinny, apartment-dwelling software professional, tell[s] his surprised friends and family that he is going to work for GE; instead of working on apps, he’ll be working on trains and planes and engines. You can be sure that Owen would much rather take the T to work in an open-plan office at the Boston Seaport than fight traffic to get to an isolated campus off the Merritt Parkway.

But the more salient point for our purpose here is that GE’s change in focus is a return to its core competency as a pioneer in engineering and research. The writer, s+b executive editor Daniel Gross, discusses touring plants in Schenectady featuring 3D printing, in South Carolina building turbine engines and in North Carolina building jet engines.

GE’s new focus is just a return to its primary purpose, harkening back to a time when it built the large turbines that drove hydroelectric plants and helped put the first man in orbit building rockets at Cape Canaveral. I just wrote a book for a former GE executive Elmer D. Gates who sadly passed away in December, only three weeks after his book signing. In his book, U-Turn Leadership  , he describes his 30-year career leading GE divisions as a manager with an engineering background and being part of those efforts that built modern industry.

GE’s move to a tech hub to attract talent from the research universities in Boston is really a return to its core competency. GE is coming home to engineering from its foray into the entertainment and financial industries. The article in strategy+business is just another reminder to retain your core competencies. Especially if you want to blaze trails into the future by continuing to engineer solutions that catapult human beings into space.

An organization is not, like an animal, an end in itself, and successful by the mere act of perpetuating the species. An organization is an organ of society and fulfills itself by the contribution it makes to the outside environment.– Peter Drucker, The Effective Executive

 

What is your company’s most valuable contribution to society and how might you perpetuate it?

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Can You Buy Your Company’s Core Competencies?

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I can make this my shortest blog. The answer to this question is:

Sort of. But not really.

However, you don’t pay me the big bucks to give you five small words and no long-winded explanation to accompany it. So, here’s your money’s worth :)

You Can Buy Talent

You can buy people who know how to perform the functions within your organization. Colleges and technical schools turn out people every day who have up-to-date knowledge. Other companies have people you can hire away from them. They can write code for you in the most popular programming languages. They know the tax laws.

Here’s the problem. You can hire people who can write code, but they don’t know the history of your particular needs and why your code was written as it was. They won’t know why you included certain fields and chose to delete others. They won’t understand the rationale behind your drop-down menus.

Tax attorneys and accountants know the latest tax laws. However, they may not understand your industry, your business structure and how your particular situation affects the way you report and file.

When you are capturing internal knowledge, you are capturing the details of what makes your company tick, and the design and quality that makes your products valuable in the marketplace. You can only get that kind of information from the subject matter experts who have expertise in your organization. Your SMEs know who to call, and which button to push to make your unique machine operate. If you don’t ask your internal experts now, you won’t know about it until the machine breaks down and they aren’t around to tell you. Or when the IRS comes calling.

You Can Buy Training

You might decide that if you lose your internal experts, you can always buy training. That is partially correct. You can always buy training, but you may not be able to buy the training you need. If you hire a generalist training company, you will get general training. An outside firm can teach you skills like project management. Or they can come in and write customized training for your needs. If you hire a company to come in and write customized training programs, they still need to talk to your internal experts and the problem becomes a self-perpetuating loop.

You Can’t Buy What Makes You Unique

Your internal trainers are all about you. Your internal trainers know your business. The key is to make sure they are able to do what you need them to do. They need budget and they need bandwidth to help you capture and preserve the knowledge and skills that make your customers keep coming back.

Internal trainers become experts-by-association. For that reason alone, internal training isn’t a nice-to-have and first-to-go when you are cutting back. Your internal trainers, and by extension all the mentors and experts you have internally who train new hires and people moving up, are the lifeblood of your organization.

The C-suite needs to be working with the training department to make sure that the current business is well-understood and well-mapped, and that future products and markets are in their line of sight. Training is about equipping your most valuable asset, your people, to maximize the profitability of your company, and that calls for ongoing alignment between the strategists and those required to execute the plan.

You may be able to buy smart people and good training on an as-needed basis, but you can’t buy your internal culture and company-specific knowledge off-the-shelf.

Does your C-Suite align with the training department?

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Your Organization’s Kodak Moment: Preserving Your Legacy

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The Consumer Electronic Show, CES to you tech junkies, featured acres of new tech toys at its annual convention last week. One car company, Faraday Future, even displayed a concept car that would make the Batmobile jealous. Amid all these Back-to-the-Future goodies, Kodak had the audacity to feature its Super 8 movie camera as its next great product release.

Here’s an excerpt from an article from eWeek, 10 Innovative Tech Products Grabbing Attention at CES 2016.

Kodak Wants to Turn Back the Clock With Its Super 8 Camera

Kodak wants to prove that old film camera really isn’t dead. The photographic products maker shocked CES with the announcement that it’s reviving its Super 8 camera, first released in the mid-1960s, for the digital age. Early reports suggest Kodak will launch the camera later this year in limited quantities. The Super 8 shoots video on 8-millimeter photographic film. Owners then have two options: ship out the film to Kodak so it can be developed for viewing on a film projector or have it converted to digital format. Either way, it’s nice to see Kodak’s determination to keep film alive.

Kodak is being at least counterintuitive here, if not downright stubborn. Kodak’s name was synonymous with film and cameras for most of the 20th Century and, by darn it, plans to carry that legacy into the 21st. This move is an object lesson in finding your internal subject matter experts, and making sure you don’t lose your core competencies. You never know when film will make a big comeback, and you will have lost your first mover advantage, even if that first move is 70 years old.

Kodak as the Poster Child for Innovation #Fail

In business management and tech circles, it is often said that Kodak lost its edge in photography due to its failure to recognize two things

  1. The pace and direction of technological change, in this case the potential for digital photography and the speed at which the new technology was advancing, and
  2. The business it was really in, which was capturing memories, not camera, film and chemicals.

When you are looking around your organization and thinking about what knowledge needs to be preserved, think big and think outside the proverbial box. Don’t assume that you can read the tea leaves regarding either the pace of change, the direction the change will take, or the ongoing need for your goods and services despite changes in your market.

One More Case in Point, and a Plug for a Relative’s Product

Film might not only be the medium that has more staying power than the futurists give it credit. Think about vinyl records. For those of you under 40, that was the way people bought music and listened to it at home before CDs and downloads.

Vinyl records are being pressed and sold again. It’s a cottage industry, mostly, but one that is gaining a new audience. Musicians and bands are turning to “pressing vinyl” again as a cool retro move. This has even spawned a business for turntables again. Take my cousin Lance, for example. His band NO BS! Brass just released its latest funky cool jazz record on vinyl. Here’s the link and shameless plug.

Whatever business you are in, you might think that the world is changing so quickly that you will soon be looking at your customers in the rear view mirror. Not necessarily. Look at technologies that you think are passe, but in the bigger picture will always have a place with small, niche markets, rebuilders, and collectors.

Preserve your core competencies. You never know when the gramophone will make its comeback.

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If You Lose Your Subject Matter Expert, It Isn’t the End of the World. Or is it?

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What is the value of your internal, proprietary corporate knowledge? What would it cost your company if you lose it?

It might be tough to quantify. Even if it is difficult to figure out what it might cost you to lose some of your valuable internal insight and intelligence, it is a worthwhile exercise. Just ask The Company itself – the Central Intelligence Agency.

The Central Intelligence Agency has found the cost of losing its internal subject matter expertise is quite worrisome. In fact, especially if you are the CIA whose name actually includes the word “intelligence”, losing vital subject matter expertise could prove to be bad news for the US. So much so, that The Washington Post devoted a feature article to the CIA’s intelligence deficit last week, Lack of Russia Experts has the US Playing Catch Up.

Briefly, the article says that after the breakup of the Soviet Union, the CIA put less effort into retaining its Russian intelligence experts and shifted its efforts to what it perceived to be the next threat, the Middle East. The article concedes that the CIA may have underestimated both the post-breakup power of its former Cold War rival as well as miscalculated whether we would remain on friendly terms. Oops.

Today, Russia and the US are growing increasingly hostile toward each other, and the article’s interviewees are concerned that the US no longer has the intimate intelligence it needs to make good decisions about how to handle our growing animosity. A US-Russian conflict has all the makings of a nuclear showdown. Threats are flying between the two superpowers, and it is clear that Russian President Vladimir Putin (ex-head of the Soviet CIA counterpart, the KGB) retained his US intelligence capability. Putin appears to know which moves to make, which veiled and not-so-veiled threats to lodge, to maneuver the global situation especially in cases where US and Russian interests diverge.

This quote from the article sums up the problem nicely:

“We’ve been surprised at every turn,” said Senate Armed Services Committee Chairman John McCain (R-Ariz.). “We were surprised when they went into Crimea, we were surprised when they went into Syria.”

Whoops.

What Will It Cost Your Company To Lose Your Internal Experts?

Do you know the cost of losing your internal expertise? In the case of the US, our lack of retaining top drawer CIA Russian counterintelligence could mean nuclear winter for the planet.

Maybe losing your internal subject matter expertise isn’t exactly an extinction level event (ELE) for life as we know it on the big blue ball. However, it could have devastating effects on your bottom line – maybe temporarily, maybe permanently. It could be an ELE for your company.

It would be difficult, if not impossible, to put a precise value on the expertise held by your critical people. It may be tough to specifically quantify, but it is an exercise worth undertaking to find out exactly what you could lose, even if you can’t assign a monetary value to it. Specific subject matter experts’ internal proprietary knowledge impacts your long-term survival.

Lessons Learned from CIA’s SME Deficit

Private corporations have learned and adopted many strategies from our military, among them the post-event analysis we sometimes call Lessons Learned. As we reflect on the CIA playing catch up with Russian intelligence, let’s ponder the takeaways for private corporations, perhaps your own. Here are my top three:

  1. Retain personnel who know your markets, competitors and competitive advantages
  2. Critical long-term strategies don’t change quickly, so maintain and update your important knowledge sets
  3. Keep your core competencies alive even when a shiny new object requires a pivot

What would it cost your company to lose your critical knowledge? Can you put a dollar value on it? Or would it cost an important competitive advantage that could ultimately be your corporate extinction level event?