Category: business

Dizengoff Center, Tel Aviv

This evening I found myself with some free time on my hands while in Dizengoff Center.
So I wandered around its less traveled corridors.
Turns out that top floors of the Dizengoff Center have corridors, which qualify to be high-class bohemian areas. The top floors have all sorts of strange shops. Occult, cabala, gifts, scents, tattoos, piercing, you name it. Those shops look well-maintained, clean, high class. Unlike your usual bohemian quarters.
Do not bother to look for those shops at the bottom floors. The bottom floors have more conventional mix of shops – clothes, restaurants and cafes, electrical appliances, bookshops and other conventional stuff.

The big surprise is why Dizengoff Center is not more famous for its collection of strange shops in far away corridors.

Microsoft is too big to be able to grow further

Microsoft’s Midlife Crisis
The root problem is that MBAs are taught to grow their businesses.
Shareholders expect their shares to appreciate in value.
Therefore, the top management of every company is compelled to hold to double-digit growth rate even though the company will be greater than the entire Earth in 10 more years.
Everyone is ignoring the reality of the S-curve. If your company already has 50% of the market, it cannot double its share of this market.

One solution is to diversify to other markets. Eventually all markets, which the company can efficiently serve, are saturated. The company then wastes capital on entry into other markets, which it is not competent to serve. The company also gets too big to manage itself efficiently, especially as it is not focused on performing well and efficiently those tasks, which it knows to perform well.

I would like to suggest another direction for advancement for oversized companies. Work on the value added per employee/subcontractor index. Let go of part of the capital, if you do not know how to invest it wisely. Sell off operations, which you do not excel in managing. Streamline and optimize your core operations. Become part of a network of independent companies, which may sometimes collaborate on large projects. Hire new employees only if their contribution raises the value added per employee/subcontractor.

When letting go of capital, disburse it as dividends to your shareholders (in fact, Microsoft paid huge dividend to its shareholders in the last year). In effect, this throws back to them the responsibility to wisely invest their capital investments, as your managers are not better than your shareholders in this task anymore.

Bluetooth Blues

Does anyone know what happened to Philips Semiconductors, which used to operate in Herzliya, Israel, and which represented the international Philips Semiconductors in Israel?

I looked for information on Philips’ Bluetooth chips and development kits. Philips’ Web site directed me to the aforementioned company, listing phone and FAX numbers for them (no E-mail). The FAX number did not work. Today the relay service (operated by Cellcom as a public service project for the deaf in Israel) informed me that the phone number connects you to a recorded reply saying that the number was disconnected.

Philips’ Web site provides a Web form for E-mailing them messages and requests for information, and I used it. The automated response arrived quickly, but it was only an acknowledgement. For human response I am still waiting.

It is amazing that an international company’s rep goes out of business and the company in question did not modify promptly its Web site.

"Business Under Fire" by Dan Carrison

Review of “Business Under Fire” by Dan Carrison, published by AMACOM. ISBN 0-8144-0839-7

When I attended August Penguin 4 (last Thursday, Aug. 4 2005), ComBooks had a booth, in which they offered books for sale. Most of the books were about Linux, PHP and other technologies. However, they had also some business oriented books.

I figured that most of the technical books are either too fat, prone to be obsolete soon, have downloadable equivalents, or already owned by me. So I went for the business book “Business under fire”.

Today I finished reading it, and here is my review.

The book is about the ways Israeli businesses coped with problems caused by the Al-Aqsa intifada, and what can businesspeople from elsewhere learn from the Israeli experience. The best thing I can say about it is that it is effective in filling Israeli readers with pride of their countrymen. The years after 2000 were bad for the Israeli economy. But, according to the book, the Israeli economy did very well considering the circumstances, having contracted only by few percents, rather than having dropped by tens of percents like, say, the Palestinian Authority economy during the same time.

Most of the book consists of interviews with business managers and leaders, large percentage of whom are hotel managers. The interviews are preceded and followed by discussions and checklists of conclusions. Overall, the impressions and conclusions look reasonable, if a bit superficial. However, I found some factual errors in the book. The city name is Tiberias, not Tiberius (pg. 27). The Dolphinarium bombing happened at June 2001, not June 2002 (pg. 142). Israel was hit by exactly 39 Scud missiles, not 40 (pg. 138, 176).

Notably missing were details about the counter-examples, of Israeli businesses, which were not as well managed, and failed during the Al-Aqsa intifada. It was mentioned that the Hyatt chain pulled out of Jerusalem (pg. 29) but there were no further details about the facts and opinions, which led to this decision, except for the murder of Rahvam Zeevi (not mentioned by name), the then Minister of Tourism, in the Hyatt hotel in Jerusalem.

Missing were also figures and statistics about the business climate in Israel. How much did the Israeli GDP drop as function of time? How large hit, as function of time, in tourist traffic and expenditures did the Israeli tourist industry have to incur? Overall effect on Israeli imports and exports? How much were other sectors, besides tourism and Hi-Tech, affected by the Al-Aqsa intifada? What was the impact of having to fly Israeli managers for meetings in New York on administrative and general expenses of running Israeli businesses with customers and investors outside of Israel? What was the impact on investments in non-Hi-Tech, non-tourist sectors of the economy?

My recommendation: buy the book if you are Israeli and need encouragement. Otherwise, wait for a second and revised edition.

Paul Graham's What Business Can Learn from Open Source

According to Paul Graham’s What Business Can Learn from Open Source, people are more productive when they work at their own hours in their homes. He uses the examples of software startups versus established software companies.

This leads me to wonder how should businesses, which have a lot of capital invested in equipment, manage the work hours of their employees. The employees have to be in contact with the machines at scheduled times, if the machines are to be operated efficiently and economically. Examples: Intel’s semiconductor FABs with their process developing and monitoring physicists and chemists, airline companies and their pilots and airplane maintenance technicians, car assembly plants.

Maybe it is a significant fact that those businesses, which have expensive equipment, do not lock into uniform office cubicles those employees, who deal with the equipment on daily basis. Sailors on a ship sometimes need to be available 24 hours a day to handle emergencies. They work under different weather conditions. They have shore leaves. Shop workers need to be in the shop during its work hours, because it is when the customers come in. However they do not sit in offices or waste time in meetings. They stand and serve customers, reorder the inventory, or whatever. The “expensive equipment” in their case is the shop’s inventory and fixtures which entice customers to leave their money in the shop.

So it seems that it is only those businesses, which do not need to provide their employees with expensive capital equipment, do lock their employees into a 09:00-17:00 day in boring offices and lots of meetings. It is precisely those companies, for which Graham’s conclusions seem to be true. The work done for those companies could be done from employee’s home at his own hours – the inexpensive equipment (such as a PC with one or two specialized peripherals) could be installed at his home. The profession is not necessarily software development. It could as well be a telemarketing operation (heaven forbid).

Will work ethic and a plan get you anywhere you want in the galaxy?

My Exploitative employers vs. lazy employees piece prompted someone to comment in private that there is a catch: Just because
some disabled people are good enough to compete with able bodied workers does not mean that everybody can.

My position is that as long as someone has enough of work ethic, he (or she) can always find something to do, which other people would not do. They might learn faster to do his job and eventually do it better than him, but they are busy with some other job, and do not have the time to master his job. So eventually he gains experience and does the job better than anyone, who might try to replace him after only a brief training.

However, there is a real problem: people with disabilities often get stuck with dead-end jobs, with no built-in career path or prospects for promotion to a better-paying job. What can someone, who knows to work, do then?

  1. Set aside time for his own advancement by ensuring that his current job does not demand more than a normal workday per day.
  2. Form an idea what kind of job and income he wants.
  3. At his free time, study something, which may help him do his dream job.
  4. Volunteer for tasks in either his workplace or for a nonprofit serving his community. The tasks are to be such that they demonstrate his ability to handle a more responsible position. Of course, he needs to perform those tasks well.
  5. Be willing to do some tasks, which are within his ability to do, and which other people hate to do.
  6. Be familiar with the political situation in his workplace.
  7. Establish a network of contacts who will tell him about job openings in other places. Even if he does not switch places, the information will put him at better bargaining position at his current place of employment.

Of course, people do not learn on their own the above advice. How do we reach out to the people with disabilities, who are desperate, are unemployed and do not know how to work and how to make work get them the kind of satisfaction from life that they deserve? How do we point out successful role models to them?

This problem is complicated by the fact that a specific plan, which works for someone, would not work for someone else. Each person needs his own plan, but not everyone seems to be able to plan ahead on his own.

Exploitative employers vs. lazy employees

There are much more employees, employee-wannabes, former employees and unemployed than employers, employer-wannabes, bankrupt employers and stinking rich former employers.
So the point of view of employees about horrible employers is better known than the point of view of employers about bad employees.

Since I became freelancer, who is responsible for marketing his own services, I was most of the time in situation, in which there is slightly more demand for my time and services than my ability to supply the demand. I made the decision to utilize the “excess demand” (or “excess marketing capacity”) to help other people get work. Since I have a disability, it was natural that I’ll prefer people with disabilities, mostly deafness.

It was in this position that I found that in spite of complaints and rants, when actually offered a job, some people turn out not to be in desperate need for a job, or not to be professional in performing their job, or to have other reasons (besides their disability, if they had one) not to perform their job in the best possible way.

I reached the conclusion that even though people with disabilities are said to have a problem getting a job – those who know to work have a job, and those who do not have a job – do not know to work either (in Hebrew it sounds better, as it uses the same word for job and work).