Business Strategy: Creaming

creaming

In the past week I have been sending information to a Silicon Valley consulting firm seeking a dialogue and an estimate to incorporate into my business plan for my startup.  Today I received a reply that the consulting firm was ending discussion because they did not want to do work that did not guarantee paid business.

In Peter Drucker’s book, Innovation and Entrepreneurship, such a strategy is called “creaming”.  It is a business plan that seeks to maintain the status quo while also seeking the largest profit margins.  This strategy allowed Japanese mini-mills to undermine and destroy the American steel industry and Japanese auto makers to undermine and destroy the American auto industry.  It is no surprise that Peter Drucker was fired by General Motors.  Now, we are facing the same business plans in the American information technology industry.

Today, I appealed the decision of that consulting company’s Vice President and wrote directly to the Owner.  I have pointed out Drucker’s observations.  I have also decided that if my appeal fails, I will go to information technology companies outside the United States.  I do not want to be part of the recurring American addiction to a recipe for disaster.

The Cloud: “Welcome, To the Hotel California”

the-eagles-hotel-california

On a dark desert highway, cool wind in my hair, Warm smell of Colitas rising up through the air.

Up ahead in the distance, I saw a shimmering light.

In my province, I have begun pushing for a Design Council. However, I am beginning to wonder if I am just calling every problem a nail or creating another stovepipe. Software as a Service, Database as a Service, Science as a Service, Art as a Service, Design as a Service, Engineering as a Service, Manufacturing as a Service, Inventory as a Service, Sales as a Service, Purchases as a Service, Currency as a Service, Accounting as a Service, Service as a Service… all plugged into the huge amorphous global system we call “The Cloud”.

My head grew heavy and my sight grew dim, I had to stop for the night.

We are being frontsourced and backsourced, upsourced and downsourced, leftsourced and rightsourced, insourced and outsourced, yesterdaysourced and tomorrowsourced up the ying yang and out the wazoo. I think the economic crisis may just be the tip of the iceburg. We may be in a deep financial dependency, but we may also be entering a 24/7/365 service dependency where we could relinquish all our corporate and personal control to third parties completely losing our ability to independently execute decisions.

There she stood in the doorway; I heard the mission bell.

And I was thinking to myself, “This could be Heaven or this could be Hell.”

Then she lit up a candle and she showed me the way.

There were voices down the corridor, I thought I heard them say,

“Welcome to the Hotel California. Such a lovely place. Such a lovely face.”

“There’s plenty of room at the Hotel California. Any time of year, You can find it here.”

The Hotel California.  Peter Drucker lit up the candle and called the way “creaming”.  We continually seek work offering higher margins and abandon our lower margin work. Our Service Providers are willing to take up the lower margin work and establish a beach head. Instead of assuming control of our supply and rescuing the lower margin demand we forego them.  The Service Providers keep the beach head and begin undermining us and we surrender the middle margin work and seek even higher margins.  Eventually, we reach the top of the ladder. Either we freeze the state of affairs and impose it downward or we get pushed off the top. How do we impose such a freeze?

Her mind is Tiffany-twisted, She got the Mercedes-Benz.

She got a lot of pretty, pretty boys, That she calls friends.

How they dance in the courtyard, sweet summer sweat.

Some dance to remember, some dance to forget.

Silicon Valley was the center of the Personal Computer revolution.  Berkeley University. Stanford University.  Drugs.  Affluence.  Free sharing of information.  Lots of pretty boys at Xerox PARC and IBM dancing to forget.  Lots of pretty boys at Apple Computer and Microsoft dancing to remember.

So I called up the Captain, “Please bring me my wine.”

He said, “We haven’t had that spirit here Since nineteen sixty-nine.”

The first ARPANET IMP log – a record of the first message ever sent over the ARPANET took place at 10:30PM on October 29, 1969 setting up a message transmission to go from the UCLA SDS Sigma 7 Host computer to the SRI SDS 940 Host computer.

And still those voices are calling from far away.

Wake you up in the middle of the night, Just to hear them say,

“Welcome to the Hotel California. Such a lovely place. Such a lovely face.

They’re livin’ it up at the Hotel California.

What a nice surprise, Bring your alibis.

The Hotel California. Apple, IBM PC, MS DOS, Lotus 123, WordPerfect 5, dBaseIIIPlus, MacIntosh, MAC OS, MS Windows, MS Excel, MS Word, MS Access, Mobile Phones, Internet, AOL, MMUG, NetScape, MS Explorer, Web 1.0, Laptops, Yahoo, Amazon, eBay, Google, Chat, Forums, Blogs, Napster, Linux, Apache, MySQL, pHp, DOOM, Cellphones, Web 2.0, Firefox, iPod, iTunes, MySpace, YouTube, Skype, GoogleEarth, Facebook, Twitter, PirateBay, Wikipedia, WoW, SecondLife, iPhone.  The permanent digital network data repository of religions, organizations, emotions, locations, actions, possessions, professions, obsessions, transactions and reservations that we are voluntarily contributing to daily.  The Service Providers have stipulations in the Terms of Service you agree to permitting them to change the terms at any time without notification.  Recently one Service Provider changed the Terms of Service declaring that they owned all member content with no limitations on its use.  They backed down, but their weapons test was complete.

Mirrors on the ceiling, Pink champagne on ice.

And she said, “We are all just Prisoners here, of our own device.”

Worldwide data centres with petabytes of personal data connected by fiber optic spinal cords ready to be sliced and diced by domestic and foreign government agencies, corporations, criminals, theives and cyberterrorists looking for gold in the data mine.

And in their master’s chambers, They gathered for the feast.

They stab it with their steely knives, but they just can’t kill the beast.

Perhaps all these records will not matter to the Always On Generation or to the Zippies.  Since everyone’s sins are online no one can be held accountable or no one could be hired.  Or everyone could be held accountable and the Republics fall and we enter the Dark Age of a new Dictator Emperor, followed by a God Emperor, followed by a Pope Emperor all with sound legalistic documentation of the inquisitions.  This is what happened to the Roman Republic and Roman Europe.  Big Brother reigned for 1300 years.

Last thing I remember, I was running for the door.

I had to find the passage back To the place I was before.

“Relax”, said the night man, “We are programmed to receive.”

“You can check out any time you like, but you can never leave.”

As you drive down that dark desert information highway, look in the rearview mirror, because 1300 years of history might be catching up with us.

Thank you for checking in.

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Universe: The Czerepak Framework

I just visited the archive of Tim Brown’s Design Thinking Blog and came across the following post:

Definitions of design thinking

Tim Brown » 07 September 2008 » In design thinking »

In my HBR article I gave a ‘definition’ of design thinking. It was:

Design thinking can be described as a discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.

On reflection this is a narrow description that focuses on design thinking’s role within business. The next sentence that I wrote.“….design thinking converts need into demand” , which I borrowed from Peter Drucker, broadens things out a bit but still assumes an economic motivation.

I am grappling with two questions as I think about this.

1. Is there a general definition of design thinking?

2. Is it useful to have one?

I think Tim has something very good here and suggest that the following would be a further breakdown of his classification:

  • Viable: Business
    • How Much: Quality
    • How Many: Quanitity
  • Feasible: Technology
    • What: Material
    • How: Process
  • Desirable: Human
    • Why: Goal
    • Who: People

Obviously, if you have been following my blog, you can see the same pattern appearing and reappearing as we explore other’s concepts.  The six interrogatives continue to reassert themselves.  However, I think I finally nailed one more aspect on the head.  I hate to say it, but it came to me in a dream about working on a programming project:

  • Reliable:
    • Where: Location
    • When: Timing

Quantity and Quality are two aspects of design/system thinking that are continually overlooked by academics and specialists, but not business people.

Interestingly enough this perspective is not new.  Clayton M. Christensen in his book The Innovator’s Dilemma discusses a four part model that fits nicely with this:

  1. Availability
  2. Compatibility
  3. Reliability
  4. Cost

I consider, Clayton’s the most empirical ordering.  Consequently, I would like to mesh Tim’s, Clayton’s and my perspective into the following:

  1. Feasibility: Technology
    1. How
    2. What
  2. Compatibility: Personality
    1. Why
    2. Who
  3. Availability: Market
    1. Where
    2. When
  4. Viability:  Business
    1. How Much
    2. How Many

Now, looking at this I am reminded of Malcolm Gladwell’s book, Tipping Point, and it adds the following character to the model:

  1. Feasability: Mavin
    1. How: Processes
    2. What: Materials
  2. Compatibility: Connector
    1. Why: Goals
    2. Who: People
  3. Availability: Salesman
    1. Where: Locations
    2. When: Schedules
  4. Viability: Customer
    1. How Much: Costs
    2. How Many: Units

Universe: A Multi-Dimensional Medium

Let’s do a thought experiment.  I want to take design thinking and abstract it to a system.

doble-vortice

Imagine that there are no solids, liquids, gases or plasmas or particles.  That the Universe is a fluid medium swirling between equilibrium and non-equilibrium in multiple dimensions.  What we perceive to be solid, liquid, gas or plasma are not states, but intersections of dimensions that describe interdimensional vortices.  Energy is the intensity of a vortice.  Mass is a vortice of a set of dimensions.  Light is a vortice of a set of dimensions.  All of the particles are vortices of sets of dimensions.  Each influence the other based upon which dimensions they are composed of.

R. Buckminster Fuller clearly states in his work that we should perceive the systems as finite four dimensional spheres.

There are only four fundamental states:  vortice verge, vortice converge, vortice emerge, vortice diverge.

iconuniversestates1

Everything we perceive are combinations of these vortice states.  The states are +/- vortice yaw, +/- vortice pitch, +/- vortice roll.

If any vortice is spiraling toward you it is positive, if any vortice is spiraling away from you it is negative.  By definition, no vortice can be stationary with respect to you.

There are only eight fundamental vortices: How, What, Why, Who, When, Where, How Much, How Many.

This gives us the following eight vortice, four state table:

iconuniverse13

Take the time to look at the terms defining each of the white cells in the table.  Each row is the addition of a dimensional vortice.  For example: Each additional “when” vortice is another separate clock.  Each additional “where” vortice is another separate radius.  All of them are factors in a system or a design.

And even this representation is inaccurate.  If we consider fractal geometry and chaos theory, there are no points, no straight lines, no arcs, no planes, no circles, no polygons, no polyhedrons, no spheres, only vortices that are above, within or below our range of perception.  Space cannot be filled with any geometric shape.  Everything is composed of vortices–spirals.

We have to abandon the flat world, flat space models we currently cling to.  The world and the universe are not infinite planes.  The world is a finite island of non-equilibrium in a predominantly equilibrium universe.

And that is it, the Czerepak (Chair-eh-pak) Framework.

Copyright (c) 2008 Grant Czerepak.  All rights reserved.

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