Solar Array in Place!

For those of you interested in the progress of our green energy project, we're happy to report that our solar array is now in place!

It's hard to tell the size of the array from the photo. But, it's pretty large - measuring about 3 meters x 5 meters (10 ft. x 16 ft.).

Our SkyStream wind turbine has also arrived. Now we're just waiting for the 15.2 meter (50 ft.) tower that it'll be mounted to. There will be a great deal of ceremony and fanfare when the wind turbine is finally raised! Expect photos and a video to be posted.

We've come a long way since October and we're still on target to go "live" in January.

Notice the patch of white in front of the array. That's right. It's a bit of snow. Winter has arrived!

Will keep you posted!

Best,

Howard

A Fresh Look at Strategy (and a green energy update)

Most of us have been fixated on the current economic crisis that seems to worsen by the day. But, how many have used this as an opportunity to revisit strategy? At a moment when we're all riveted to current events it's also the perfect time to think about the future.

By way of an analogy, here's a quick update on my green energy initiative. BTW, thanks to those of you that have given me such positive feedback on it.

As you can see from these photos, we're continuing to make great progress and should be generating electricity very soon. The concrete pad is now sufficiently cured, the base of the tower is ready and the frame for the photovoltaic cells is in place. We already have the photovoltaic panels on site and are awaiting shipment of the tower and wind turbine - which should arrive within the next few weeks. And, the paperwork for "net metering" is being submitted, which will enable us to sell excess electricity back to the local utility.

The second photo offers a view to the west - the dominant source of wind. We're very fortunate to have such a great site - with an average wind speed of 10 - 12 mph! If you look closely, you might be able to see the the wind turbines (there are 12 of them) from New Hampshire's first commercial wind farm, which is about 10 miles away. This wind farm recently went online and will soon be generating 24 megawatts of electricity - enough for 10,000 homes!

Our wind turbine is the first residential one to be constructed in our town and will generate about 3KW. Like the commercial wind farm, ROI won't be achieved for 30 or more years!

As I mentioned in an earlier post, this is our investment in the future and an important contribution to our community and the world. It is "strategic" - in the truest sense of the word. In light of the current economic maelstrom, it is tempting reduce costs and scale back our efforts. However, I am not willing to retreat or change my "strategic plan" for green energy. Of course, in parallel, we've also been (tactically) pursuing energy conservation. For example, we've replaced most incandescent lights with fluorescent or LED equivalents, we unplug appliances when not in use, and we've super-insulated the house and updated the heating system for optimal efficiency.

Likewise, in the business world, it's tempting to completely abandon long-term strategy in favor of short-term tactics (e.g., cost reductions). However, I believe that we can't allow ourselves to lose sight of our goals for the future. Do you expect your company to be around in 25 years? If so, what sort of future do you envision? How will you achieve your vision? What sort of scenarios have you developed to help think about the future?

In fact, I believe that the current crisis is the perfect time to revisit strategy, and to update, enhance or totally recreate it. In my book, The Performance Management Revolution, I cite strategy as one of the four tenets of any performance management initiative. The use of scenarios - which consider political, economic, social and technological possibilities - will help direct any strategic thinking exercise.

With a compelling and credible strategy, the current crisis need only present a temporary set back, instead of allowing it to redefine the enterprise, ultimately hampering its future.

Best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Why Performance Management and Business Intelligence are Crucial at this Moment

Now that the US elections are behind us, we can start to refocus on the biggest single issue facing businesses (and individuals) right now – the economy. In January, I started talking about an economic recession:January blog posting

I think it’s now unanimous that a global recession is upon us with more bad news emerging each day. In fact, today the OECD issued a statement saying that its 30-nation member area “appeared to have entered recession”: OECD Press Release

Even Asia is not immune, with China announcing that annual industrial output growth has slowed to 8.2 percent for October. And, I think we’re just getting started! All signs point not only to a meager Q4 but a Q1 that likely won’t be much better.

In the corporate world, we’re seeing many respond with a “kneejerk” reaction to this malaise: budget cuts, RIFs, financial guidance reduced, assets sold, bankruptcies, etc. These organizations have adopted a sort of “bunker mentality” to face the threat. As a result, they overreact, shedding more “ballast” than they need to stay afloat. By exaggerating the challenge and overcompensating, they weaken the enterprise for the future. One doesn’t have to look far to find these sorts of companies – for example: a number of companies in the auto and telecommunications industries. A friend of mine, who works for a large telco, shared with me extreme frustration concerning ongoing and across-the-board RIFs. Seasoned employees have been eliminated in favor of cheaper, less experienced labor, making it hard, if not impossible to get important work done. While this may please Wall Street (in the near term), this sort of tactical approach doesn’t bode well for their future.

In contrast, the wise organization carefully analyzes the current threat, developing multiple scenarios for the future and creates suitable short and long term plans. This forward-thinking approach allows management to proceed strategically, with an eye to the future, but still grounded in the present. Of course, organizations may still have to take measures to reduce costs – perhaps dramatically. However, they will do so with greater precision – ensuring they haven’t seriously hampered their future ability to execute. It’s also reasonable to expect that this sort of sober, yet visionary direction will expose new opportunities to invest in, which will have been obscured to less sophisticated organizations. A good example of this, in my opinion, is Alcoa. Hit with an industry-wide surplus of aluminum (and a dramatic decline in price), it took aggressive action to reduce costs, employing “a four-part model that spreads the curtailments across [the] global system and minimizes the costs associated with plant shutdowns and re-starts and, in turn, minimize the impact on plant communities.” You can read their press release here: Alcoa Press Release

Of course, the title of this posting has already given away my core message – that EPM and BI are critical during this time. This is true. However, I don’t mean just the technology. I mean the philosophy! This begins with transparency and accountability. Without those as core tenets of an organization, the best technology won’t help. However, under the right conditions, BI and EPM can work wonders – allowing an organization to quickly develop perspective, to assess strengths, weaknesses and capabilities. To plan, execute, analyze, re-plan, alter strategy, and plan and execute again in a continuous cycle – matching the changing dynamics of the real world.

So, I encourage organizations to avoid the reactive and tactical approach to a worsening economy and take a more strategic outlook – embracing transparency and accountability - with BI and EPM as enablers – delivering true perspective, precision of execution and agility and a better chance to survive and see the next era of growth.

Best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Sustainable energy update

We've made great progress on our renewable energy site - including running all of the electrical "chases" and pouring 15 tons of concrete for the pad including the base for the wind turbine tower and piers for the photovoltaic arrays. Now the concrete has to "cure" for thirty days before the tower can be erected. So far we're right on schedule for going live in January!

-Howard

Sustainable energy as a starting point

Let me start this posting, by talking about one of my pet projects that I'm very excited about. I've invested in a sustainable energy project, which will go live early next year. We're installing a wind

-driven turbine and solar photo-voltaic (PV) arrays - for a total of ~5KW/year of electricity generating power. This is something I've wanted to do for a very long time. So, I'm realizing a dream of mine. It's a modest project by most standards, but it's my investment in the future of my community and the Earth.

Right now, it's just a big whole in the ground. However, by the beginning of next year, it will start to generate electricity and will serve as a new energy source for the local utility when it produces excess power. In any event, it will reduce our dependence on the electric company for power and reduce our carbon footprint. Here's a picture of what it will look like when it's done. If our initial project is successful, we will plan to expand it to generate even more power in the future. For those that are interested in learning more about the wind turbine we're using, check out http://www.skystreamenergy.com

So, why am I telling you this? Well, as some of you may be aware, we are in the midst of a global economic mess. Some of you may be wondering how we got here and have probably heard various politicians and economists promoting their theories. However, I think it's amazingly simple. Most people these days are not focusing on the long term, say 50 years or more. Our thinking has become frighteningly short term. Most businesses (especially those that are publicly traded) focus upon near-term results and are tactically driven to deliver positive top and bottom line growth. This is exacerbated by the demands of Wall Street and discourages companies from investing long term. It takes courageous leadership to turn a blind eye to Wall Street to do the "right thing" because of the immediate and inevitable negative response - resulting in a lower market cap, class action law suits, and a potential hostile takeover. Not for the faint of heart.

Back to my sustainable energy project for a moment. If I had had a short-term mindset, using ROI as the sole criterion for investing in renewable energy, I never would have done it. Even with government incentives, the ROI is between 30 - 50 years out. Some people think I'm crazy. Why bother investing 50 years out when I will (undoubtedly) be gone from this world? It's because I'm betting (hoping) that people will still inhabit the Earth after I'm gone. It's my attempt to go against the grain of conventional wisdom and do what I know is right.

The bottom line is that if everyone thinks that someone else will worry about the future, then no one will! Each of us is responsible for thinking, planning and investing for the future - now! This means individuals, families, communities, nations - and businesses. Fifty years is a good starting point. A century would be better. If everyone had this perspective, imagine how different and better the world would be. We would be forced to think beyond our own lifetimes and personal interests and would collaborate on a scale unknown before to ensure the future of the Earth and our civilization.

Perhaps I am an idealist. Or maybe crazy. Or both. In any event, I'll keep everyone posted on my little sustainable energy project. If you have a sustainable project of your own, let me know!

All the best,

Howard

Don't forget to check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Summer is over and it's time to get back to work.

Well, it’s the end of the summer here in the Northern Hemisphere and time to get back to business. Summer and vacation are always a nice change, but it’s good to be back working – writing, and talking about Business Intelligence (BI) and Enterprise Performance Management (EPM)!

So, now that we’re back, I’ve been pondering: what will business look like at the end of 2008 and going into 2009?

I don’t want to appear like the harbinger of doom, but businesses continue to be profoundly affected by a declining economy. Overall spending is down and RIFs abound. Although many have not officially cut budgets, they aren’t being allowed to spend them either. One client of mine referred to their spending plans as "fluid". Of course "fluid" implies "flowing", which is certainly not what she meant.

In a recent study that I participated in, almost all organizations are hoping to use EPM solutions to reduce costs. For small enterprises, this means operating more efficiently and better leveraging existing resources. For larger enterprises, it means being able to reduce the workforce and continue to function.

On the brighter side, a slow economy represents an ideal opportunity to focus upon implementing performance management solutions, which will help right now by delivering greater efficiency, but also better position companies when the economy begins to improve.

Still on the brighter side, EPM is enabling new kinds of organizations to emerge and thrive. In a case study that I presented last week at TDWI, I spoke of a young company that outsourced nearly every function – using EPM as the “glue” to hold it together. In Tom Malone’s The Future of Work, he talks about new organizational structures becoming possible as the cost of communications decreases. Well, the cost of communications these days (i.e., The Internet) is practically free. A dividend of this phenomenon is that EPM is now available to any organization – using the Internet.

Accordingly, innumerable Software-as-a-service (SaaS) vendors have emerged, offering less expensive EPM solutions that are relatively easy to buy and implement. Now, I don’t want to seem like a cheerleader for SaaS, but that same study indicated huge interest and openness to SaaS solutions across the board: small and large organizations, IT Departments and business users. So, what does this mean, exactly? Well, at least two big things that I can think of:

1) Smaller, innovative organizations can emerge – anywhere – and rapidly become serious competitors in most any market and

2) The very notion of software is going to change for everyone.

On the supply side, I expect to see a growing number of SaaS-based solutions appear on the scene. Back in 2000, you had to be a dotcom to get funding. Today you have to be a SaaS solution. The large enterprise software vendors will also offer SaaS solutions, but only half-heartedly.

You see, SaaS competes with the dominant enterprise software model (e.g., higher margins). So, for a time, it’ll be like the “wild, wild west” with a myriad of offerings from many smaller suppliers. This is a good thing. There will be amazing innovation until consolidation begins. If you're interested in hearing more about the subject, I recently participated in a webcast with DMReview: http://www.dmreview.com/dmradio/10001661-1.html

So, in spite of a difficult economy, there are some hopeful signs – with EPM as a key enabler of whatever the emerging business and software paradigms turn out to be.

Next month I'll be a keynote at Palladium's Business Performance Conference 2008, in Boston, September 9th - 12th:

http://www.thepalladiumgroup.com/events/exec/Performance/Pages/Keynotes.aspx

Hope to see you there!

All the best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Some stories from the road

It feels like summer here in New Hampshire. It’ll be over 90F (32C) today and pretty humid, making me long for the cold of winter. Of course, one way to avoid the weather is to go on the road - spending time in air conditioned airports, airplanes and hotels.

While on the road over the past few weeks, I’ve had the pleasure of presenting at and facilitating a number of executive roundtable events across the US. It’s been great meeting some new people, learning about their businesses and the challenges they face.

Here are three things that I’ve learned recently:

• Whether companies are publicly saying so or not, IT budgets are getting cut. This has been confirmed by everyone that I’ve spoken to in the past few weeks. In some cases I have heard of explicit cuts of 5% or more. In other cases, additional levels of approval or scrutiny, delay spending beyond the budget “window” – causing a “de facto” budget cut.

• Many feel “stuck” in their ability to drive Performance Management (EPM) initiatives within their companies. I spoke to one woman who felt completely hopeless in her efforts to inspire management to move forward with an EPM initiative. My advice was to try and partner with Finance to break the logjam. However, sometimes that’s not possible – e.g., politics, lack of CFO vision.
  

• The inclination to buy “yet-another-tool” remains strong – even though most acknowledge it’s the wrong thing to do. Of course, vendors like to sell more technology. However, most organizations already have plenty. What they lack is a roadmap and the vision to properly deploy it. But, buying another tool is so much easier than addressing the real problem: a lack of management commitment and organization dysfunction.

Next week I’ll be off to Copenhagen for IM2008. I’ve checked the weather forecast and it’s supposed to be much cooler than home, making it possible to be outside and cool at the same time. I can’t wait!

All the best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!