CISCO CEO John Chambers presentation given to MIT was during the recent recession felt around the globe, but especially hard here in the US. The first thing Mr. Chambers discusses is how companies or a nation should deal with a recession. The most important question is actually a statement in my opinion and that deals with being ready to hit the next recovery period running and with a plan. He also asks a question of who likes change and which is more important to a company, innovation or operational excellence. He makes the point to the audience that both are equally important for success in the long run, especially in the 12-18 months after a recession. This is where he brings a term called sustainable differentiation as it relates in how to make yourself different and more viable from your competitors.
Mr. Chambers states that it is far more important to get market transitions right then competing directly with your competitors. He believes that change is everywhere, and you need to be prepared or get left behind. He also stated that his organization functions better when they utilize a functional committee vs. a typical organizational committee. His main points all relate to how CISCO is performing and is ready for the next wave if technology. One of his main points seemed to focus on the two words, speed and skill. Being ready and being prepared and being adaptable will bring success if you are ready for it.
Wednesday, February 23, 2011
Wednesday, February 16, 2011
Knowledge Creation within Nucor Steel
Nucor Steel is one of the top ranked steel companies in the world. They have achieved this status through the knowledge conversion process. Specifically, the knowledge creation involved in the spiral effect of knowledge management has allowed Nucor to succeed in a highly capital intensive environment. The vision CEO Ken Iverson had for Nucor was a process in which accumulating knowledge would be key for success.
Nucor Steel mills are built with an ideal employee base of 250-300 employees. This allows for knowledge acquisition and knowledge creation to be managed and handled at a smaller level. The smaller number of employees also creates and fosters a "family" type atmosphere. This is due to knowledge retention in Nucor Steel. Employees are never laid off, and have life time employment. The longer you are with someone, the more you develop a bond with someone. And since the mills are not that large, the reality of knowing someone fairly well increase substantially.
Knowledge identification and outflow are also implemented at Nucor Steel. Bonuses are tied to output generated by a team of workers, not individual output. Also, to achieve the bonus, it requires thought process by the operators involved as well as management on how to improve or invent a better process to achieve a bonus. Conversely, when the economy is in a recession, layoffs do not happen, but hours are reduced at the plant, which means lower wages for the employees, but the management takes a bigger cut of wages, resulting in a "share the pain" mentality which fosters respect and loyalty throughout the mill.
Nucor Steel also does its own improvements to its mills. When remodeling a mill, the process involves everyone involved from the operator to the supervisor to the plant manager. This knowledge transmission ensures the task is done in the most efficient way and feedback is gathered from all involved parties to ensure the remodeling occurs to what is best for the mill and generates the most productive output possible.
Through the use of spiraling knowledge, Nucor Steel has shown how successful a manufacturing process can be when everyone is involved. They have consistently grown in size since their inception in the 1960's and with over 1200 people waiting in line to apply for 8 jobs, that is an indicator of how much people want to work for Nucor.
Nucor Steel mills are built with an ideal employee base of 250-300 employees. This allows for knowledge acquisition and knowledge creation to be managed and handled at a smaller level. The smaller number of employees also creates and fosters a "family" type atmosphere. This is due to knowledge retention in Nucor Steel. Employees are never laid off, and have life time employment. The longer you are with someone, the more you develop a bond with someone. And since the mills are not that large, the reality of knowing someone fairly well increase substantially.
Knowledge identification and outflow are also implemented at Nucor Steel. Bonuses are tied to output generated by a team of workers, not individual output. Also, to achieve the bonus, it requires thought process by the operators involved as well as management on how to improve or invent a better process to achieve a bonus. Conversely, when the economy is in a recession, layoffs do not happen, but hours are reduced at the plant, which means lower wages for the employees, but the management takes a bigger cut of wages, resulting in a "share the pain" mentality which fosters respect and loyalty throughout the mill.
Nucor Steel also does its own improvements to its mills. When remodeling a mill, the process involves everyone involved from the operator to the supervisor to the plant manager. This knowledge transmission ensures the task is done in the most efficient way and feedback is gathered from all involved parties to ensure the remodeling occurs to what is best for the mill and generates the most productive output possible.
Through the use of spiraling knowledge, Nucor Steel has shown how successful a manufacturing process can be when everyone is involved. They have consistently grown in size since their inception in the 1960's and with over 1200 people waiting in line to apply for 8 jobs, that is an indicator of how much people want to work for Nucor.
Wednesday, February 9, 2011
Standford Hospital and Silicon Valley
Standford Hospital, which is part of Standford University recently announced a partnership with major Silicon Valley companies in conjunction with a new hospital. Apple, eBay, HP, Intel, Intuit and Oracle are teaming up with Standford to build a new hospital which will create a global model for patient-centered, technologically advanced health care. The design of the hospital will feature a multidisciplinary, intervention platform. The purpose of this approach is to co-locate services such as radiology, surgery, and the Emergency Department, which will enhance the care each patient receives.
The design of the hospital will utilize the latest in technology and be designed to anticipate the ever changing medical and technological progresses made, with flexibility to adapt to future innovations that are not even imagined yet. However, the hospital will remain sensitive and balanced in regards to Standford being a healing environment responsive to the emotional, social and psychological needs of patients and families.
The fact that Standford is doing this is no surprise. Standford has a history of taking the lead in being at the forefront of changes in the medical industry. Standford was one of the first medical institutions to institute and implement the fundamentals of Six Sigma back in 2003. With the success they have had, there is no doubt the technology being implemented will be a success.
The design of the hospital will utilize the latest in technology and be designed to anticipate the ever changing medical and technological progresses made, with flexibility to adapt to future innovations that are not even imagined yet. However, the hospital will remain sensitive and balanced in regards to Standford being a healing environment responsive to the emotional, social and psychological needs of patients and families.
The fact that Standford is doing this is no surprise. Standford has a history of taking the lead in being at the forefront of changes in the medical industry. Standford was one of the first medical institutions to institute and implement the fundamentals of Six Sigma back in 2003. With the success they have had, there is no doubt the technology being implemented will be a success.
Thursday, February 3, 2011
Bounded Rationality
In his presentation at Google headquarters, Professor Ariely in his introduction narrative, states he wants to understand why people with good intentions and experience, still manage to get things wrong. He then displays a few optical illusions which focuses the audience on the topic he is talking about. He spends a great deal of time talking of organ donations in Europe. The point he makes through research is that people are so used to doing things one way, or they assume that information is presented in a certain way that the resulting decision is one which is made illogically.
Professor Ariely through his research is able to show that people consistently make systematic and predictable decisions which in more times than not, are incorrect decisions. When applied to business and knowledge management, it is quite easy to see how this is done everyday by companies. For example, his study of the economist magazine subscription shows that how choices we make can be influenced by incorrect or misrepresented information. Professor Ariely clearly shows us that a decision we make is how we feel about information that we process, whether the choice is wrong or right.
Professor Ariely through his research is able to show that people consistently make systematic and predictable decisions which in more times than not, are incorrect decisions. When applied to business and knowledge management, it is quite easy to see how this is done everyday by companies. For example, his study of the economist magazine subscription shows that how choices we make can be influenced by incorrect or misrepresented information. Professor Ariely clearly shows us that a decision we make is how we feel about information that we process, whether the choice is wrong or right.
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