Mile-High Mega Kites Could Pull Giant, Floating Power Plants

via wired.com

Finally my dream job, commercializing two things I’m passionate about, Wind Energy and Kiteboarding.

Take a huge oceanic catamaran, stick a hydroelectric turbine underneath it, and hitch it to a 6.5 million-square-foot parafoil flying nearly a mile in the air. That’s a Korean research team’s new proposal for generating gigawatts of clean energy.

As the parafoil pulls the boat, seawater would be forced through the turbine, which generates electricity. The 800 megawatts of electricity produced would separate seawater into hydrogen and oxygen by electrolysis, and the hydrogen would then be stored on-board the ships.

I sure hope that 720,000 meter foil is water relaunchable!!!

Read the full story at Wired Science.

Posted via web from jeffreyjdavis’s posterous

First Derivatives: Are You Getting Better, Or What?

IN A NUTSHELL: Regardless of the subject or the metric, you are either getting better or getting worse, you can’t be just “holding your own.”

“Time Changes Everything.” “Everything Changes Over Time.”  Said differently, or more technically, most things which you can measure can be considered as a function of time.  This applies to most personal metrics:

• Your weight,
• Your career progression,
• Your achievement of key goals,
• Your net worth,

as well as to most business metrics:

• Your company’s revenue run rate,
• Your company’s profit run rate,
• The yield of a manufacturing process,
• The quality of your company’s products or services, or
• Your customer’s  satsifaction with your offerings.

As a leader, when you ask people in your company how well you are doing on a certain key metric, they rarely tell you that things are rapidly getting worse.  I’ve found that they also tend to under represent areas where you are doing well.  I’ve found that the most common answers you are likely to hear are mediocre answers such as “it’s stable”, “it’s doing OK”, “so-so” or “we’re holding our own.”

Well, if these answers are similar to the answers you usually get, I have a news flash for you.  Your people are LYING to you! Here’s why.  To get  slightly technical again and take you back to Calc I, the slope of any function F(t) is defined by its  first deriviative, F’(t).  The only points where the function is not either increasing or decreasing are the local maxima or local minima, the points where F’(t) is equal to zero.  Everywhere else, the function is either increasing or decreasing.  Do the math!!

So other than for the occasional brief millisecond, your business has to either be constantly getting better or worse.  If your people can’t tell you with conviction that things are getting better, chances are they are probably getting worse and you need to get on it!! Challenge those First Derivative assertions!!  Keep the velocity positive!!

Risk, Part 3 — Vulnerabilities In Your Team

IN A NUTSHELL: Part 3 of a 3 Part Series: Your people are your most mission-critical resources, where do you have blind spots or weaknesses due to unplanned talent losses? Part 1 of this series can be found here. Part 2 of this series can be found here.

CCL Courtesy of ItsaGreg

We all know that a business doesn’t run without the people that keep it running.  We also know that people aren’t a “fixed asset” in the sense that they aren’t permanent.  They don’t work in one job forever — they get promoted internally, they get recruited away, they get fired, they quit, they get sick, they even die sometimes without clearing it with their manager first.  Given the fact that we know intuitively that people can be a vulnerability, it’s sometimes amazing how much of the firm’s intellectual capital we allow to be concentrated into the brain of one individual, with no clear backup plan.

How many of these people work in your company?  (Names changed to protect the innocent):

• Larry is the technologist who is the only one in your company who understands Technology X, which is core to your overall business model.  He knows it deeper than anyone ever could because he’s worked at the company for 30 years and he invented Technology X 25 years ago.  Larry is either eligible for retirement now or very soon and sticks around primarily because he honestly enjoys the technical challenge.
• Chuck is just like Larry, but was he was unfortunately downsized as part of  a reduction in force back in the 1990′s and has been working as a part-time consultant since that time.   Even though the company laid him off, you keep paying him to come back because he’s the undisputed industry expert in Technology Y.  Chuck is unexplainably loyal to the company that laid him off, but occasionally threatens to “really” retire one day.
• Betty Sue is the administrative clerical person who over time has inherited process ownership of some arcane yet mission critical business process in your operation.  Her domain could be anything from setting up new product codes to processing customer claims to managing product costing to administering the timeclock and payroll databases.  Whatever it is, it’s really boring, yet really important.  It is not uncommon for Betty Sue to be the curator of a legacy DOS batch file or a complex system of interlinked Access databases and Excel files running on a dedicated box off of floppy disks under Windows 95.
• Rod is a new hotshot that joined the company a couple of years ago as his 1st or 2nd job out of college.  Wet behind the ears, but full of energy, he has attacked everything he’s been assigned with a ton of passion, and has voluntarily taken on multiple other projects outside his normal job assignment.  He’s hitting it so hard that you are not even sure of all the areas that he’s improved.  You can see a lot of runway for him in the company.
• Biff is the career sales person who has cultivated key relationship equity with decision makers at several of your key customers after years and years of selling and thousands of rounds of company-paid golf.  His perpetual tan implies that he probably doesn’t really work all that hard, but when you need a favor from the customer he can usually get it and when they have a problem, he can usually do a lot to help it “go away” quickly and painlessly.
• Johnny works in the factory, either as a maintenance technician or as a production employee, as he has ever since high school (25 – 40 years ago).  He is the “Horse Whisperer” for your key process equipment.  He probably has female names for your key equipment and when they are sick, he knows what’s wrong just by listening to the sounds of their voices.

Now what would happen if you showed up Monday and one of these people’s chair was empty?  What would happen to your business if a key piece of your talent pool was no longer part of your team, regardless of the reason?  First, let’s address generically your potential backup plans that you (should already) have in place:

• For Larry and Chuck, these are long term knowledge vulnerabilities that you should identify as part of your annual organizational review.  You have to develop understudies for these talents, even if it means carrying somewhat redundant headcount for some period of time.  These are likely to be niche talents;  assume that it will take time to find the right backup, and realize that it may take years to come close to transferring a meaningful portion of the guru’s  knowledge.  Get started yesterday.
• Johhny’s specialist skillset is similar to the above case, but it should be somewhat easier to identify a suitable apprentice and have him or her work along side Johnny for a period of time to learn the key skills.  You are likely to lose some of Johnny’s speed of solution when a backup takes over, but you are less likely to totally shut down your business.  Start a rotational cross-training or apprenticeship program to bring others up to Johnny’s level.
• Biff probably guardedly protects his key influence chips, but you have to have others on your commercial team accompany him on key strategic visits to start to spread your relationship equity around on your team.  Selective forced territory / account rotations, while potentially inconvenient for the customer, can force relationship diversification while Biff is still on the payroll and can come in for support if needed.
• You should consider re-engineering Betty Sue’s work package so that it is more digitized, streamlined or transferable.  Rod may be a great resource to help her pull off the redesign.
• Rod will not be in his job forever, you already know that.  From day 1, you need to challenge him to document his improvements and to develop smooth transition packages for each of his projects so that his improvements can be handed off to his successors and institutionalized in the company after he has moved on and up.

There are several ways that may help you to get a sense that someone could be leaving:

• As always, the best method is to talk openly and frequently to your people.  Ask them flat out: “How’s the job going?” “What are you working on?” “What could we do to make your role more challenging or more satisfying?” You maybe surprised what some pointed open ended questions may uncover, and your people will appreciate the interest, assuming you follow up.
• For people nearing retirement, you should engage in career planning with them to understand their plans and their commitment to help you secure a smooth transition.  It’s a good idea to try to understand what may be going on in their personal lives as well, as spouse or  family health and career issues can often have unplanned impact on your employees.
• It is usually obvious if someone has “checked out” of their job due to lack of interest or assignment scope change. Visible changes in enthusiasm or energy are a good sign that someone may be disengaging from their job.  This is particularly important after any major organization restructuring.  The survivors often harbor discontent which ultimately could impact their desire to work in the company long term.
• If you are connected to your folks on key social networking platforms like LinkedIn, Twitter or Facebook, you may also pick up signs that folks are evaluating other options.  A rapid stockpiling of LinkedIn recommendations or a number of recent network connections to recruiters are tell-tale signs of trouble.  I don’t advocate using these tools to spy on your people, but if they are in your network, remember that that information is there for your consideration.

Ultimately, you need to have a backup person for every key talent in your company.  Ideally, everyone is so satisfied with working for your company that they work until a carefully planned retirement date.  Neither of these dreams happens very often in reality.  Careful planning can help you minimize the potential downsides of the organizational reality.  Please share your experiences with managing these types of risks in your business and any tricks or tips that you have developed.

Risk, Part 2 — Safeguarding Your Daily Business Operations

IN A NUTSHELL: Part 2 of a 3 Part Series: Think analytically about potential weak spots in your ongoing business operations to identify potential vulnerabilities and to proactively develop contingencies. Part 1 of this series can be found here. Part 3 of this series can be found here.

Most companies rely on a complex network of interwoven systems, processes and business relationships to support their daily operations.  Whether your company is small , somewhat self-contained and relatively simple, or a large complex globally distributed manufacturing operation, you are highly reliant on a number of interlinking pieces which must mesh perfectly for your company to run continuously as designed.  No one is truly self-sufficient in today’s global economy.  Take a look at the number of different accounts in your Accounts Payable ledger if you don’t believe me.  A lot of things have to go 100% right every day for your company to run smoothly.

The economic downturn has had a devastating impact on almost every company.  Many companies are failing or have ceased to exist.  The companies which have survived have almost universally taken drastic actions to reduce costs, reduce employment levels, elminate waste and streamline their operations.  While this is undoubtedly healthy for these firms and for the economy as a whole in the long run, one unavoidable but potentially under-appreciated aspect of this LEANing out is that the risk profile of most companies has increased to some degree.  Typical cost savings strategies such as reducing inventories, lengthening preventative maintenance cycles, lowering general employment levels, reducing delivery frequencies, etc. are all smart cost saving moves, but all have the impact of  increasing the risk level of that company’s ability to execute its mission flawlessly.  Although each individual action may be negligible, if your company relies on 50 other supporting cast member companies / partners to conduct your line of business and they have all increased their likelihood of failure by 1%, your overall “rolled throughput yield likelihood of success” level has decreased by nearly 40% as a result (99%  ^ 50 = 60.5%).

It’s helpful to reassess all the cogs in all of your wheels and to think through the likelihood of a failure in any piece that could cause a business interruption.  A good brainstorm of  “What could possibly go wrong?” around the standard  “5 M’s” of an Ishikawa or Fishbone Diagram may get you started on a list of things to consider:

• Machine: Equipment breakdowns, Inability to get critical spare parts, Drifting machine performance, etc.
• Materials: Lack of supply from key suppliers, Sole source vulnerabilities, Quality issues due to material substitutions, Supplier bankruptcies, etc.
• Man: Key talent defections due to other family or economic issues, Trade secret leakage, Downsizing / job consolidation performance impact, etc.
• Methods: Shortcuts on procedures due to downsizing, Poorly documented crisis mgmt procedures, etc.
• M-vironment / Mother Nature: Interruptions in utilities, Lack of  Logistics / Freight carrier availability, Longer lead times due to capacity reductions, etc.

I don’t think you have to be overly exhaustive in this brainstorm, but you and your team should be able to come up with 30 – 50 things which are potential issues to consider.  Please do not get lulled into the trap that “that could never happen to us”.  For many companies, Fragile is the new normal.

Once you have a laundry list of potential issues, you need to screen them to determine which ones you really need to deal with and plan for.  Although rigorous, the best tool for segregating the critical issues from the less worrisome possibilities is the Failure Modes and Effects Analysis.  A detailed analysis of the use of this tool is far beyond the scope of this post, but you can find a good overview from the American Society for Quality Control.  In essence, with an FMEA you are objectively ranking three critical dimensions of each potential failure mode in your business on a scale of 1 (least risky) to 10 (most risky):

• Severity:  This issue is of only temporary or minor impact (1) ==> This issue could literally shut my business down (10)
• Occurrence:  This issue is highly unlikely (1 in 100,000 chance)  to occur (1) ==> There is a very real chance (>50%) that this could occur (1)
• Detection:  I can certainly detect this immediately if it happens and I have a plan to deal with it (1) ==> I probably will not detect this until it is too late and by the way I do not have a recovery plan (10)

I don’t think you need to be overly picky on these ratings but I would advise applying them as consistently as possible with some measure of team collaboration.  Once you have established ratings for each aspect of each potential failure, multiply them to obtain a composite Risk Prioritization Number (RPN), which will be a number between 1 and 1000.  I recommend that you and your team develop solid plans for any risks with a composite RPN over about 300 and for any issue with a Severity rating of 7 or above.  In general, you will be developing plans to reduce the likelihood of Occurrence or the ability to Detect and Deal with the Issue, as the Severity can only be reduced by redesigning your business model in most cases.  You can find a number of useful Excel templates and guidelines for conducting an FMEA at the FMEA Info Centre.

I urge you to keep this exercise in perspective.  You are assessing business continuity risks, not designing a Lunar Lander Module.  Don’t  get stuck in the weeds as you brainstorm or prioritize.  You don’t need to overdo the precision and complexity of the analysis, but I hope that you will find that open minded brainstorming, objective assessment and then a structured prioritization tool like FMEA may help you proactively implement risk mitigation plans that improve the likelihood that your business continues running “without a hitch”.  Good Luck, and please share your experiences in the comments.

2009 In One Word

via npr.org

What one word did over 5000 Facebook and Twitter users use to sum up 2009? This Tag Cloud From Wordle lays out the largest clusters of sentiment. Which major feelings would you have that aren’t represented here?

Posted via web from jeffreyjdavis’s posterous

20 Miles Kiteboarding At Wayside Park

Had a cold but fun good session in the sound at Wayside park today, wind was highly variable, up and down between 12 and 19 knots from the NNW.   I would alternate between being fighting to stay on plane to being nicely powered.    I was on a Rebel 14 meter kite and split the time between a twin tip and a strapless surfboard.   It was cooooold, 45 – 50 F, I had to take a break in the middle to get some warmth back in my fingertips.  My Garmin Connect tracks are here.

16 Miles Kiteboarding In The Gulf On Christmas Eve Eve

Had a good session in the Gulf yesterday, wind was 14 – 22 knots ESE, with overhead wind swell on the outside.  I was on a Rebel 14 meter kite and split the time between a twin tip and a strapless surfboard.   Forecast for today (Christmas Eve) called for 30 knots, but it hasn’t showed up yet, and it’s been raining all day.  Maybe Santa will deliver again on Christmas day!!

The World According to Americans

via ritholtz.com

Although hopefully an overstated generalization, this cartoon map sums up many of the flawed and uneducated perspectives of (at least some) Americans.   Put together, they do not create a very attractive picture of our country of our people, do they?   If you are American, please do your part, especially when dealing with those from other cultures, not to act like a jackass.   It reflects poorly on the rest of us.

Posted via web from jeffreyjdavis’s posterous

Don’t Be Afraid To Stand Out From Your Crowd

I’ve had this picture on my hard drive for a while; I don’t even remember where I got it.  Every time I see the thumbnail, I can’t help but smile, or even laugh.  Best I can tell, it’s a legit, non-photoshopped family picture, probably snapped begrudgingly in the portrait studio at a Wal*Mart somewhere in southern Indiana.  I can imagine that there is some pretty interesting drama in that family.

But you have to respect the second son.  He knows who he is, and he knows who he is not.  Despite the conformal pressure in his family unit, he’s his own man, and probably always will be.  I’m sure he will be an effective leader one day, and I respect his individuality.

Be true to yourself, regardless of who the system tells you you should be. Excel based on your achievements, not based on your appearance.  If the system tries to program you for sweater vest and clip on bow-tie but your inner Axl Rose promises organ rejection, you know which way to go . . .

Posted via email from jeffreyjdavis’s posterous

Risk, Part 1 — Stress Testing Your Business Strategy

IN A NUTSHELL:  Part 1 of 3 — The economic environment has dramatically reshaped the external environment of many companies, including yours. Use this framework to stress test your current business strategies so that you are well-positioned for the new realities. Part 2 of this series can be found here. Part 3 of this series can be found here.

We all know that the world has changed dramatically over the last 24 months.  Things are happening in the external business environment which have never happened before, and words like “unprecedented”, “meltdown” and “crisis” have become the  fodder of normal everyday conversations.  In this type of environment, which is still rapidly evolving, it is wise not to take anything for granted.  Not even the things which you’ve always taken for granted.  Especially not the things which you’ve always taken for granted.  In the next 3 part series of posts, I’d like to walk briefly through some thought processes for thinking about risk in your company and developing plans to deal with those risks.  Intelligently dealing with risk really involves four key thought processes:

1. Contemplating the range of scenarios which COULD happen,
2. Actively considering, as best possible, the likelihood that each of those WOULD happen,
3. Developing strategies to detect as early as possible that one of those scenarios IS happening,  and
4. Having a mitigation or response plan which can be quickly executed in the case the scenario DOES happen.

In this first post I will start at a high level, that of risks to your business strategies.  In the next post, I will discuss how to think about risks to your daily business operations.  In the third and last post, I will discuss risks to your organization and your teams.

Every company hopefully has a set of strategies which it formulates and executes to help it meet its objectives.  (For the purposes of this post I am going to assume that your company already has a set of clearly articulated strategies which you have already agreed on.)  A good set of strategies is formulated based on your company’s posititioning relative to its external environment (customers, suppliers, competitors, regulatory, etc.)

In the same way that Michael Porter’s Five Forces Model is a useful framework for developing your company strategies, it can also be a good tool for “stress testing” your strategies.    Pull out the output documents from your company’s last strategic planning session and briefly review as a team the course you charted at that time.  After reviewing your strategies, go around each of the five segments of Porter’s model and brainstorm several of the most extreme and surprising changes which you could imagine happening to your company’s environment.  I advise you to really step back and detach your self from the situation;  it may help you to think more broadly if you imagine what could happen to a competitor, as opposed to yourself.  (For whatever reason, people never seem to be pragmatic or realistic enough about the  possibility of bad things actually happening to themselves, but find it easy to imagine them happening to someone else.)  The range of scenarios you come up with should be extreme and include such things as key customers going bankrupt, drastic inflation in key raw materials,  significant overhauls in regulatory constraints, or an indirect competitor totally obsoleting your business model.  I would advise shooting for two to four scenarios for each element of the external environment, so that you end up with a list of between 10 and 15 scenarios which could potentially play out.

Porter's Five Forces

Now think about each of these environmental changes from two different dimensions:  (1) How likely is it actually to happen?, and (2) What would the impact be on our company and our current strategies?  Arrange your situational possibilities on a two axis grid with the x-axis representing the perceived likelihood and the y-axis representing the potential impact to your company and its current strategies.  Try to force some segregation, so that everything isn’t automatically highly likely and high impact.  You should end up with a grid looking something like the figure below:

Environmental Factors

Divide the cluster roughly in half, and think carefully about the how would you cope with the possibilities in the right upper quadrant of the plot:

• Would our current strategies still be effective in the event that the scenario played out?
• If not, how could we modify our strategies to make them more capable in the new environment?
• How would we know if one of those scenarios were actually beginning to develop?
• Would any of these situations offer up any new opportunities for competitive advantage for our company?

I recommend assigning  key members of your senior leadership team the responsibility of continuously monitoring one each  of these potentially high impact trends so that you can mobilize your strategic shifts as early as possible in the event of occurence.  Using this kind of review periodically (at a minimum annually) will help you to keep your company’s strategies tuned to your rapidly evolving environment and will make sure your company remains positioned to respond to emerging threats and to capitalize on new opportunities in your external environment.  How has your company adopted its strategic planning and review process in response to the current economic environment?

Check back soon for Part 2 of this series,  Operational Execution.