Connect the Dots - Unlimited Inventory

In a previous post, I wrote about the struggles I've had in trying to grasp some of the production concepts in my OpsMgmt class.  It's not that the idea of building something in a factory was foreign to me, but there was just something that wasn't clicking.  And I couldn't figure out what it was.

This afternoon, I came across this Hal Varian video.  Dr. Varian is the Chief Economist at Google, and a Professor of IT at Cal Berkeley.  In one of the segments, he talked about the production of "goods" in a digital economy.  His explanation of how these goods were made up of bits flipped a switch in my head.  That was it, that was the thing that had been my mental block for the last couple of weeks. I've become so ingrained with the thinking of everything being online and digitized, I've become somewhat immune to the realities of creating physical goods.  I live in a digital world, and so I've adapted my way of thinking to center around bits. And as he states below, "..there is no shortage....and there is no inventory" 

"The great thing about the current period is that component parts are all bits. That means you never run out of them. You can reproduce them, you can duplicate them, you can spread them around the world, and you can have thousands and tens of thousands of innovators combining or recombining the same component parts to create new innovation. So there’s no shortage. There are no inventory delays."

One of the things I constantly have to remind myself about the MBA program is that it's not just to make me think about my current environment.  It's to also make me think about different or unknown environments.  This is one of those areas.  I just need to keep reminding myself that these two worlds run in parallel, and finding interesting and productive ways to have them intersect is the challenge.  

Connect the Dots - Activity Based Costing (ABC) and Web Computing

Wow, this Obama guy really is promoting change....2 posts about accounting in less than 2 weeks!!  

This article shows how a software developer created a model that leverages cloud computing (Google AppsEngine, Amazon S3, Twitter), which is driving new computing and business models, and embedded Activity Based Costing (ABC).  ABC is one of the early focus areas of our MgmtAcct class this semester.

So instead of having silos between the production groups and the accounting groups, it's tightly integrated via software that is open to all developers and all customers.  

While this is a small example, it does create an interesting blurring between IT, Ops/Production and  Accounting, especially when you start thinking about the business opportunities that happen when companies leverage the cloud and open development environments. 

Connect the Dots - Networking your Social Networks

As I was flipping through HBR this evening, I came across an article about Social Networking, written by Alex "Sandy" Pentland.  Dr. Pentland runs the Human Dynamics group within the MIT Media Lab.  Back in the spring of 2007, I had the good fortune to meet Dr. Pentland, get to know about many of the really cool things being built within the Media Lab, and actually work on the project that is described in the paper.  My former company was a Media Lab sponsor and we co-funded some of the initial work in this area of dynamic social networking.  Needless to say, it was a nice surprise to see something you worked on (albeit slightly) published in HBR.

So what does this have to do with MBA programs?  Actually, quite a bit.  We covered social networks briefly in LOB with Dr. Miller, but only to the extent that people need to be aware of where the strong vs. weak links are within their companies.  Social networking came up again this weekend, during a discussion in our OpsMgmt class, as we discussed the connection between groups within the production process (product mgmt, engineering, production, etc..). What Dr. Meredith pointed out is that many times one of these groups will be outsourced, and then eventually other connected groups move as well because the communication channels break down over distances.  

This latter point seems to be proven out in Dr. Pentland's MIT research.  As much as I enjoyed using technologies like Telepresence, distance has consistently proven to be a huge barrier to effective communication and collaboration.  So why does this matter?  It matters if parts of your business are moving offshore, or great distances from where you are located.  Chances are, if that group is really important, then they are going to get tired of the communications breakdowns and look to move your function closer to them.  All the more reason for US companies to step up their efforts to bring expertise and skill-levels back up to competitive levels with the rest of the world. Unfortunately, it's more than just low-cost labor that might move jobs overseas.   

Connect the Dots - Relating to what you're learning

In a previous post, I wrote about how an article about the accounting model at Apple helped me connect some learnings from FinAcct (deferred revenues) with something I'm interested in both personally and profession, since I work in the technology sector.  Amazing concept...personal interest in the subject, useful learning area...1+1 = 3!!  

One of the things I'm really enjoying about this semester is that every class seems to be very focused on including assignments that make you apply the current topic to an aspect of your current or former business.  Not only does it make you think about how it's relevant to your world, but it also forces you to go meet people outside your current functional area.  It's a networking exercise, which I believe is where at least 50% of the value of your MBA comes from. 

(btw - that value is a complete SWAG, so don't ask me to do an analysis of it....bad MBA student!!...not using objective numbers to justify a decision or conclusion)

But what happens when the course work covers an area where your company really doesn't focus on anymore?  This is somewhat of an exaggeration, but let me give an example.  In our OpsMgmt course, much of the focus is on manufacturing processes, the creation of physical goods.  We also cover service-centric businesses, but the majority is product-centric businesses.  I work for a high-tech company that sells products, but we don't "build" any of them anymore, at least not the finished good to our customers.  We write software, and then put it on commodity computing hardware, which is built and distributed by 3rd-party partners. Our product managers do handle aspects of this, such as forecasting, but it just becomes a number in a spreadsheet,  So as much as OpsMgmt is critical to business survival, it's a tougher connection point for me because it's not something I actively think about.  

So the $64,000 question becomes, what's the best way to connect with a new topic when the path for connecting is either very bumpy or non-existent?  

Connect the Dots - Apple's use of deferred accounting for iPhone

How about that....it's Day 2 of the Obama administration and there is already change in my world!!  That's right, I'm actually going to write about accounting in a positive light. I'm not exactly sure why accounting frustrates me more than something like strategy, but I suspect that it's because accounting seems to flip-flop between defined rules and interpretive rules. Or maybe it's just because all the examples in the accounting books are about industries I don't know very well, hence I don't commit myself to it as much.

To my pleasant surprise this morning, I found this article on iPhone deferred accounting.  Being somewhat of an Apple fanboy, I started reading it with interest and all of a sudden I start seeing all these accounting terms from this semester and last semester.   And they made sense.  And I kept reading, and reading, and reading.

After finishing the article, a couple thoughts came to mind:

1. Some of the accounting concepts are starting to soak into my head.  I understood the viewpoint of the author, as well as actively thinking about the flipside from an investor vs. business manager vs. regulator perspective.  I know it seems small, but it was really a lightbulb moment for me.
2. I've been around Silicon Valley companies for 15yrs now, so I'm fully aware of the hype-machines that they can create.  But I also live in today's economic situation and understand the problems that occur when exuberance and excess are practiced above all else.  So I found myself taking the viewpoint that while Apple's decision could be short-changing stock investors in the short-term, it seems like a much more responsible long-term decision to represent the true value of the company.  It matches revenues from the phone sale (device) with revenues from the service it provides (monthly fee from AT&T). And in today's economic situation, that sort of responsibility seems like a breath of fresh air.

One of the things I'm learning from this MBA program is there are times when you need to disconnect yourself from the underlying business and simply focus on the numbers, because otherwise you allow subjectivity (or boredom, in my case) to creep into your analysis.  In this case, I got lucky that the subject and the concept held my interest.  But it also showed me that I need to keep paying attention in accounting...

 

Connect the Dots - The Give and Take between Old World and New World Media

As I've mentioned before, one of the things I hope to do on this blog is draw some linkages between the topics we study in the classroom and their usage in the real world.  One of the discussions from our last ITMgmt course was the pace of technology change and how it's impacting many traditional businesses.  Most of the discussion was about how innovation, specifically technology-centric innovation, was creating something called creative destruction.  

The USAir plane crash yesterday actually did a nice job of highlighting both sides of the discussion.  Initially, several people commented on the speed of content which emerged from citizen journalists using social networking tools like Twitter. They lamented that journalism and mass media were becoming dead industries as media companies weren't able to keep up with the pace of information flow that could be achieve through today's popular consumer technology.  Today, CNN representatives commented that they weren't worred about the pace of the information, but were actualy happy that they now had a free content source, instead of what they were used to paying for.  

It's interesting to look at both sides of that argument.  While I believe that CNN should still be concerned about continuing to maintain viewership to their flagship product (CNN TV), it's good to see that they are farsighted enough to embrace the technology change to the advantage of their business.  

More than a WFU MBA journal

Since I'm still in time-warp mode until January, backfilling a bunch of posts to recap the 1st semester, I'm occasionally going to preview some of the other things that I hope to do with this blog.  If it were just a journal, I doubt anyone would keep reading.  But if I take Seth Godin's advice and create a Tribe, then the possibility exits that we can create interest and expand the conversations we have in Winston-Salem (and Charlotte) each week

1 - "Decision of the Week" - Each week, I will take a recent topic from the Business Press and highlight certain aspects that are worth exploring in more detail.  It may be an executive decision, a competitive market shift, a unique marketing approach, a savvy financial transaction or some other interesting element.  I'll open up the discussion (via blog comments) to my classmates in both the Winston-Salem and Charlotte programs.  We have mechanisms in the program to do this within the context of a class topic, but this should let us explore cross-topic impacts of business decisions, as well as open it to outside input and discussion.

2 - "Discussion of the Week" - This segment allows me to highlight an interest discussion, or person from each weekend's discussions.  These discussions may involve classroom topics, or may center around back-of-the-napkins brainstorming that often leads to great ideas and great companies.  I also hope to highlight some of the gifted personalities from the WFU EXFT2009 class, or across the WFU MBA programs.  

3 - "Connecting the Dots" - Academics are greats, but unless you can tie it to real world activities, it's just learning for learning's sake.  This segment will highlight connections between the topics in class, and real world examples of the concepts in practice.  

4 - "inVinCible Ideas" - What would a MBA program be without the creation of new business models and company ideas?  This segment will spotlight the activities that classmates are exploring and developing as they plan for the next step in their career or life.  VC funding may be required.

[Update - Dec.28, 2008] - The more I think about this, and the more I follow people like Fred Wilson, Umair Haque and the read books like What Would Google Do?, I have to ask myself if the recent worldwide economic crisis doesn't require us to truly think differently about how we conduct business, define government and shape societies.  I don't have a name yet for this segment, but there will definitely be segments where we'll explore this type of thinking, which should be a lot of fun.