Market dominance and hubris (Part Three)

Nokia failed completely by totally losing its entire smartphone leadership and eventually sold it, leading to the end of the brand as a market leader. Nokia was founded in 1865 by mining engineer Fredrik Idestam, and operated as a paper mill in Finland. Eventually, Nokia’s paper mill, merged with rubber and cable companies in 1967, and only pivoted heavily to electronics and mobile phones business in the late 1970s to early 1980s, establishing Mobira Oy in 1979 and launching its first car phone, the Mobira Senator, in 1982. It then introduced their first handheld phone, the Mobira Cityman 900, in 1987, and shifted focus to telecoms in the early 1990s. 

It’s when Jorma Ollila, CEO from 1992 to 2006, is said to have stayed "too long" (14 years) at the helm of the Finnish company. He led Nokia to become the world’s largest handset manufacturer, but the company struggled to transition to smartphones, lagging behind in software (Symbian) and failing to respond to the iPhone's launch. He was replaced by Stephen Elop as CEO (2010–2014) who would be heavily criticized for the "burning platform" strategy, leading to the sale of Nokia’s phone business to Microsoft. 

 

On the other hand, Jean Beyl the inventor of the early Look bindings, also remained in charge for too long and soon became a problem because the skill sets required to create his inventions (creativity, passion, deep technical knowledge) went against the skills required to scale a business (delegation, operational discipline, sound marketing, financial management). 

While Beyl was a visionary in his own right, he always struggled to transition from "doing" into "leading," micromanaging and creating bottlenecks in decision-making and erecting a "founder's syndrome" where the organization became constrained by his management style, ego, German girlfriends and refusal to delegate. Still Look did survive. 

Having come too late with its “9 series” to enjoy a positive impact, the company went bankrupt, was picked up for one Franc* by Tapie, a French raider whose sole focus was to line-up his pockets, leading to another quick sale, another long hiatus, until Rossignol skis picked up the pieces, intelligently simplified the line and made it an accessory to its ski line instead of being a self-standing philosophical statement. 

So unlike Nokia, Look did not disappear but kept chugging along as it gradually transitioned. The iPhone was a "tsunami" that metamorphosed the industry in 2 to 3 years. While there are parallels between the origin of the two stories, the outcomes were drastically different as Nokia didn’t change hands until it was too late, while Look benefited from the hiatus created by two or three different owners. 

Also the nature of the ski business made it extremely unique with its inherent seasonality, its challenging short three-month annual cash-flow period, and its small number of participants (around 75 to 100 millions skiers in the late 2000s?) plus the gigantic difference in size of the respective industries (mobile phones being 1,000 times larger than alpine ski binding in sales volume) can’t be overstated even though both markets spanned the globe... 

 *As opposed to Salomon’s $1.4 billion acquisition by Adidas in 1997

Market dominance and hubris (Part Two)

When it comes to comparing how the iPhone took over of Nokia, to what Salomon did to Look in the ski industry, I can only speak from personal experience as a former Look employee, in thinking how Salomon rose to prominence over Look ski bindings in the 1970s, culminating in the late-70s launch of the S727 "Driver" series. 

This product evolution holds a strong parallel to the Nokia-Apple shift, as it highlights a technological pivot from an established, engineering-heavy design to a user-centric, more functional, and more accepted solution that redefined industry standards. Beginning in the 1960s, Look was a dominant, trusted, high-performance, and high-prestige ski binding manufacturer with its Nevada & Grand-Prix models.

Salomon, however, changed the game by shifting the intangible idea of ski-safety into user-focused design. The big difference was the hubris from Look’s inventor Jean Beyl who didn’t believe in funding a strong R&D and listening to his market, as opposed to the open mind and common sense exhibited by Georges Salomon who took their respective companies in dramatically different directions. 

Look bindings (like the Nevada) often required specific, sometimes difficult installation on skis and adjustments to ski boots, but most significantly was rather inconvenient to use on snow. Salomon began by simplifying its engineering, making it less costly to manufacture, designing bindings that were easier to install and adjust at the ski shop level, and ultimately much easier to use by the end-consumer. 

After years of struggling with its 404 and 505 then 555 series, Salomon gradually introduced several “game-changer”. First the 444 a mid-range ski binding, super easy to get in and out of, then its functional ski brake that made safety straps obsolete, followed by the release in the late 1970s of the Salomon S727 that was the final nail into Look’s coffin.

Unlike Look, which initially was slower to integrate the brake into the binding mostly because of its specific design, Salomon, also a leader in patents, was a leader in integrating a sleek brake technology that tied the skis together, which quickly became a standard replacement for run-away straps. Then at the back-shop level came the “pre-mount” system that had mounting screws already attached to the bindings and ready to screw into the holes, not to mention its much more convenient mounting templates. 

Salomon was able to place itself in the end-user shoes (shops and consumers) while Look simply would not. Tomorrow we’ll see the similarities and also the key differences between these two declines...

What to do now that Trump has full power?

Following two weeks of mourning, despair and hand-wringing about the outcome of the US Presidential Election, it’s certainly a bad idea to start haphazardly on one random path. Instead, it might be time to ask questions like “What’s next” and “What workable options are there?” 

We have in fact many choices. 

• One is to do nothing, be just a spectator and watch the destruction of the American institutions at the hand of a disruptor who has no idea about his own end-game. 
• Another is to be angry and resentful for at least four years and self-destroy ourselves in the process. 
• A third is to find an actionable way that will make a difference, no matter how small or large, and will end up adding to similar efforts by others and account for some positive influence. 

By far, the latter approach seems preferable to me and I want to explore it fully. 

It will take some sorting out, a lot of creativity and, why not, might end up making a huge difference, even if it seems insignificant at the moment. Stay tuned!

Biden and the Peter principle

Joe Biden’s quandary reminds me of the Peter principle. For those of you too young to remember, I’m talking about a management concept explained in Laurence J. Peter’s book (1969) who observed that people, in organizations, tend to rise to "a level of respective incompetence". 

In other words, people are often promoted within hierarchical organizations based on their success in previous positions, and as they keep on climbing the ladder they eventually reach a level at which they are no longer competent, as the new skills they’d need in that new job have no longer anything to do with those they had acquired previously. 

This said, I tried to dig a little more into that subject to see if the principle could also apply to politics and to president Biden. That’s how I ran across an article written by Russ Sloan, a guest columnist, that appeared in the Daily Commercial, a Florida newspaper, on December 4, 2020. This piece, clearly not written by someone who loved Biden, remains interesting in terms of tracking our current president’s political career and limitations. 

Biden was elected to the U.S. Senate in 1972 and was re-elected in '78,'84, '90, '96, 2002 and 2008. All of this time, he was in the same Senate position, a pretty cool and quiet line of work. During his lengthy Senate career he tried twice for the presidency and failed miserably both times. The first time was in 1987, when he had to withdraw upon revelation that he had plagiarized a major speech from British Labor Party leader Neil Kinnock. 

He also ran in the 2007 primaries, finished a dismal 5th and, as a consolation prize, became Barack Obama's VP in 2008, that he’d serve in that capacity for eight years. On his last and successful attempt in 2019, it’s interesting to observe that Biden and Sen. Kamala Harris, both presidential candidates, failed a different moments in their efforts to seek their party's nomination, yet theses two uninspiring candidates managed to beat Trump in 2020 as America was sick of the continuous chaos the Donald created. 

At the end of all his attempts, the "Peter Principle" seems to have matched the old adage that the "the third time’s a charm” and his election had more to do with sheer luck than merit...

Tesla sings the blues

As Tesla just announced the lay off of more than 10% of its global workforce, 

Elon Musk is explaining away that he’s “Preparing the company for its next phase of growth, and it’s extremely important to look at every aspect of the company for cost reductions and increasing productivity, and as part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally”.

The fact is that his acting like a jerk over the past two years has not endeared him with his core clientele that is educated, progressive and doesn’t appreciate Musk’s political statements. As a result, it has decided to quit buying its electric car from Tesla. 

This is as simple as that, but no Wall Street analyst has the imagination nor the courage to tell that kind of painful truth. It certainly isn’t the “medieval”, Republican, Trump-supporting public that will buy EVs, they love to breathe gasoline and diesel fumes too much for that. 

Would I purchase a Tesla today? No, I’d get it from someone else. Do I still love my Tesla? Absolutely! I simply wish Toyota would buy this great company and get Elon Musk and his self-righteousness out of my world!

Benchmarking?

As most of us know, benchmarking is that process of comparing one’s own performance against that of others, typically those who are considered to be the best in their field. This is not something we do too much in America, because we are so much individualistic, and by doing so, we sometimes love to reinvent the wheel. 

This said, as a Nation, we’re much worse, because we believe in “American Exceptionalism” among other nonsense, which means we’ve always been, we are and will always be the very BEST of all nations. We simply don’t even try to look at them! Yet, by ignoring the practice of benchmarking we’re shooting ourselves in the foot. 

As a country, we’re missing to measure our own products, services, and processes against the rest of the world, and by doing so, we miss a lot of good opportunities as we’ve got a tough time identifying best practices that could be adopted to improve our country’s performance. Sure, we aren’t too shabby, but we sure could do better, to at least maintain our level, as we are in decline in many domains.

Consider for instance the metric system, some European children education methods, cost-effective public health care systems, all that way to our very own Constitution! Benchmarking could be used to improve any aspect of our country, from administrative efficiency, to voting system and to citizens’ satisfaction. It would also help us identify new opportunities and help us stay well ahead of our competition that is the whole wide world. 

Instead, we have the largest defense budget in the world that is probably not the most cost-efficient, nor the most nimble and effective (look at Vietnam, Iraq and Afghanistan). Adopting benchmarking would mean so much to us, like improving our performance and help us identify areas where we can do better like controlling greenhouse emissions and developing sustainable new energy sources. 

It would also reduce costs, by adopting cost-saving best practices on things like materials, labor, and energy. It would also make for a more improved citizenry’s satisfaction by improving the value and the quality of our lives, which could lead to a happier country. So, what are we waiting for?

The Beaver Creek ski world cup fiasco

Something is awry with the international ski federation (FIS). Its top management brings ski racers, their coaches, officials, tech support and press people across an ocean and half a continent, spend valuable time and money preparing venues with the help of volunteers and huge logistic expenditures, then weather doesn’t allow for the races to be run on the planned days, and all goes to waste. 

I was also almost going to forget mentioning this huge carbon footprint for naught! I know, there are the sacrosanct TV rights contracts, the money they bring and then racers have to be in Val d’Isère next, but there should be a better way to run an international competition calendar! To start with, events should be clustered per continent.

Only one trip to North America or Asia within one season, the rest should stay in the Alps perhaps with the caveat that Scandinavia should be treated as another region. Then if the “white circus” finds itself in such a remote area, delay the events till it’s possible to run them and to hell with the TV constraints or make them adaptable! 

After all skiing requires just the right weather conditions and is so dependent on Mother Nature compared to other sports! Also, have less events, lighten the calendar load big time so athletes can recharge their batteries a bit. In this age of AI and computer aided scheduling that shouldn’t be rocket science to bring ski racing back into an area of good old common sense!

Bringing some order to my music files

Between my computers and my phones, I had lots of music files that used to be floating around and as a result, were very difficult to control and enjoy. 

To give you a sense of their number, they range between 10,000 and 14,000 depending on the way I use them. 

We’re talking about digital audio files, mostly under the mp3 format. Some are just music I like to listen to, ranging from songs in all genres and many languages, some instrumental tracks including pop, jazz and classical, and finally some soundtracks that I use for producing my videos.

Last week, I spent most of my free time organizing these various files to the point that it drove me almost crazy. Today, I’m almost done except for some fine tuning that remains to be done and some additions that still have to be made. 

Now, I’m almost ready to relax and listen to some good tunes!

Heads of state that can’t manage

As I have often lamented, politicians who end up leading nations have to be political animals, or better yet, sleazy salesmen who promise the moon or something of the sort to be elected and end up delivering very little. 

Having charisma can help a lot too, the end goal being to get elected at any cost. Aside from years of experience and a few educational failures along the way, no specific skills are required from our national leaders. 

So they generally prove to be terrible managers because that’s a skill they simply don’t have and have never attempted to learn.

Often times, I have been tempted to think that CEO would make good head of states, but more often than not, famous CEO are not good managers either. 

Neither are celebrities (Ronald Reagan), peanut farmers (Jimmy Carter) or billionaires (Donald Trump). What I’d love to see at the helm of my country is just a good, no-nonsense manager!

Bullying vs. Leadership

Our departing president wasn’t a leader, but a tyrannical bully. 

Of course, it’s not more bullies that we need in our complicated lives, it’s more good leaders. Through their ability to work well with others, leaders let their example speak for itself and soon, naturally rally their followers to their cause and to their flanks.

Bullies, on the other hand, only know how to exert domination upon others, use intimidation to show who’s the boss and believe they’re entitled to order others. True leaders have people skills and are capable of empathy towards others. They also know how to motivate their troops, unlike bullies that never hesitate to mock and demean people they don’t like. 

Leaders are flexible and smart enough to adapt their communication style to a wide variety of individuals and believe in the abilities of their team members, while bullies only can work with people who worship them and acquiesce to their demands. Besides, bullies hold very low opinions and expectations of everyone but themselves. 

Strong leaders also believe in adopting a transparent style of communication and know how to be assertive when they have to. On the other hand, bullies are secretive, aggressive and play people against each others. It’s also fair to say that leaders have high emotional intelligence, while bullies are just the opposite. 

I’ll conclude with a quote from former Secretary of State and General Colin Powell: “The day soldiers stop bringing you their problems is the day you have stopped leading them…” This, of course invites this question: Would you ever think of bringing your problems to a bully?

Electoral mess

Our election system in America should set an example for the rest of the world, yet, at least to me, this year appear to be a chaotic mess. It's been more than 10 days since polls closed in our crucial mid-term elections and some races are still undecided.

Sure, the contests that are still pending were far too close to be called, but still, this seemingly messy process stems in part from the fact that each state has its own set of rules and systems, then you add to it county-by-county variations.

In many places the voting infrastructure is woefully underfunded, and the management of the process woefully inefficient. The other aggravating factor is that the use of mail-in and absentee balloting have been largely expanded, making it more convenient, but also slowing the whole process.

It would seem to me that the country that leads the way in information processing and customer service, ought to do a far better job, as at times like this, our electoral process looks more that one would expect from a third-world nation.

If I were Sundance Resort General Manager...

We love to drive to Sundance, Utah, that mini ski resort, tucked away under Mt. Timpanogos and under the permanent protection of Mr. Robert Redford, its owner. Less than one year ago, on that blog, I suggested that I should become director of maintenance for the resort.

Today, I'm aiming a bit higher and would like the general manager's job (GM). Let me explain why. We were just there on Sunday and wanted to buy an ice cream. The weather was nice, right in the low eighties. We went inside the country store and waited in line. We couldn't see any ice cream offered for sale, but remembered that we had one last year.

Our turn arrived six or seven minutes later. I asked the employee:
“Do you have ice-cream?”
Blank stare, a short moment of silence and the staff member goes: “Yeah, I guess so”...
I asked: “Which flavor do you have?”
The employee: “Just chocolate.”
Me: “Can we have it in a cone?”
The employee: “No, just in a cup...”
Me: “Sayonara!”

In my book, this kind of service is called “missed opportunity” and while the back of the country store and restaurant used to be a bit lively just a few years ago, it's now going to the dogs.

No one is there. If I were the GM I'd rent these spaces to craft merchants and food joints to create what is missing at Sundance: Life, plain an simple. I would also maximize the cash flow of that place without making it too mercantile because Redford wouldn't approve of it.

Well, the only problem is that I'm not the Sundance GM yet!

Planning takes long, but always pays...

I often is the case that the more time we spend planning something, the better the outcome. Sure, we can get very lucky and a last minute inspiration can sometime turn into a successful realization, but in general, the more time and effort we place into some endeavor the most satisfaction we end up getting.

This way of doing things therefore imply that our mind be always turn towards the future in order for us to begin conceiving and start preparing tomorrow's projects. As we grow older, the temptation is to let projects dry up so there's no need for planning anymore, but who wants to let this happen?

Scientific Management

When I was in high-school, I discovered Scientific Management or “Taylorism”, that was invented by the American Winslow Taylor, at the end of the 19th century.

This method of work management addressed and improved workflows in order to enhance labor productivity. I've always liked the idea, but it's only later in life that I began to apply it whenever I could, either on for specific projects or just for repetitive, daily tasks.

Not only does this saves me time on mundane activities, but it also take the angst, the "paralysis" and temptation for procrastinating that often accompany any “big project.” My mastery of the process isn't always perfect, but at least, I'm aware of it and try to get it better as time goes by...

Hooked on Crédit Agricole...

I still have a few Euros sitting on a bank account that I opened more than 40 years ago, when I lived in France.

Since May 8, I've been battling to get that money back and it's been a major struggle. Employees at the bank just don't want to do it. They're either on vacation or far too tired when they return to work, and after I got their bosses' email and begged him to return my euros, nothing has happened. Perhaps, I was loved so much by that bank, that they didn't want me to go away...

Losing patience, I went over everyone's head and searched for the institution's CEO contact info; after finding it was Mr. Jean-Yves Barnavon, I told him how incompetent and disengaged his “workers” were.

I finally received an email from him promising some action. I'm not getting my hopes too high yet; after all, it's still France!

The time trap

Being “retired” can be dangerous in terms of time-management. There seemingly is no need for it as time seems to roll out with both regularity and predictability and there's also that illusion of inexhaustible time-abundance.

Reality, in fact, is that there never seems to be enough time in a day to even accomplish the most mundane tasks and as a result, projects are always running after me in a totally uncontrolled manner. Should I return to a more regimented life style in order to enjoy more relaxation? As paradoxical as that sounds, this might be the key to a truly laid back lifestyle...

A good outcome

Building our home has been a pretty big job and a continuous challenge, but today this is long forgotten as we love the end result. So when we met yesterday with the contractor to finalize the ultimate details and settle our accounts, we almost got what we wanted and we're now turning the page on the whole adventure.

It all ended well because, from the get go, we knew exactly what we wanted, we worked very hard at every step of the way, never assumed anything would go smoothly, kept excellent records, spent an inordinate amount of the time on the site and maintained the pressure on the entire time.

A good lesson learned and a wonderful outcome. Are we ready for another one? Why not!

The importance of the daily check

I don't know about you, but when I first glance at the mirror in the morning as I'm brushing my teeth, I look at the man facing me, long enough to get puzzled, scared and concerned. I look at my reflection like you would look at the old car you're still driving even though you should have traded it in a long, long time ago.

There is visible damage on the body and the interior looks even worse, not to mention under the hood or the body that you no longer desire to see. That's the moment when you ask yourself the question. That good old automobile already shows 133,000 miles on the odometer; how in the world will I be able to take it to 200,000?

That existential question generally calls for more questions and concerns, as well as a vague road map, for plotting the remaining 67,000 miles. Concepts like managing the old vehicle, not speeding too much, easing up on the brakes, watching the payload and changing the oil even more often, to only list of few of them.

Now that you've got the picture, do I still have to launch on a point-by-point comparison with the old guy still blankly staring at me in the mirror?

Are you what you manage?

Jobs are not created equal. There are management jobs that are almost impossible to pull off, while others are a cakewalk. For example, I remember that during most of the 70s and 80s, Nordica ski boots were the easiest product to sell, to the point that many would say that even if a monkey were in charge of its US distribution, the American sales and marketing company would still do extremely well.

Of course it was the case of “it's the product stupid!” While most competitors were focused on performance and gimmicks, Nordica made boots that felt good on the foot and were always very comfortable. It all changed when Benetton purchased the company in the late 80's. They added skis, bindings, clothing a dubious marketing campaign and all this extra burden managed to screw up the entire brand.

This example goes a long way in demonstrating that if a company has a sound product, with at least one clear advantage, plus a decent organization it can ride the wave of success for a very long time. Of course, those at the head of these exemplary organization will tend to believe they're the very reason for this when in fact the business they think they run, operate in fact on automatic pilot.

On the opposite end of the spectrum, some companies are dysfunctional from the get go, either because the founder has no well-grounded common sense, there's no corporate vision, the efforts to grow the organization are sporadic and erratic, or the company is simply in reactive (catch-up) mode.

Acquisitions are always a big danger because they bring foreign, disruptive elements and generally are a huge distraction on a management that is used to run simple, predictable business models, but totally unable to deal with bad surprises, weird challenges and a constant need for repairs...

Getting my fair share of tar

Last week, as an asphalt company was repaving a neighborhood street, they parked one of their smaller size truck next to our home. When the work shift was over, the truck left its parking location, but instead of turning around the block - a very easy task – its lazy driver chose to turn around on our brand-new driveway laid with pavers.

Of course, the tires smeared those with fresh asphalt and after some picture-taking, back and forth communication with the paving company and the City, I got a sizable check for my pain of cleaning up the tar residues left on my property. The morale of the story is to always do what it takes, right away, stand for your rights and get something in return!