I could see that coming from a mile away

“I could see that coming from a mile away.” It’s cliche and hyperbole all in one! The phrase is often used when an obvious outcome reaches fruition. Sometimes you get lucky based on intuition with an outlook. But what separates the lucky from the good is the ability to use Strategic Analysis to cut through the “chatter” and see what really matters and then do that over and over again.

Now before those not interested in business click off the window, this is also a life principle. Instead of “Strategic Analysis” replace it in the above sentence with “Wisdom” and you have the same relationship and outcome. Wisdom provides the ability to see where others cannot. To project out in time with a reasonable confidence that an outcome will take place. Crazy thing is this as I’ve observed: people love Wisdom when it reaches a conclusion they like, but they despise Wisdom when it reaches a conclusion they don’t like. That is completely upside down thinking when you look at it objectively and hence why I do this blog.

Anyway, here’s a real world, bonafide case in action in the business world. Two years ago as I was having dinner with a colleague while on a trip in Germany, I whipped out my pen and drew this diagram on a napkin and then took 2 minutes to walk through the implications of what it means to the Semiconductor Test Equipment segment:

Given where the industry segment was at the time I said these are the following long range implications:

1) There will be industry consolidation of existing firms

2) The companies in the ditch must choose to stand toe-to-toe with the emerging “big guys” or become industry specialists

3) The industry has matured and with that the game is now about making money, not beating each other up through market share

So what’s happened over the last 2 years (and no, I’m not revising my memory or history, my colleague can attest to me saying this):

1) Two attempts at consolidation with the last one successful: Advantest buys Verigy. This leaves 2 big guys at the far right of the curve in the diagram above: Advantest and Teradyne. This principle is called the “Rule of 3” unless the market is clearly dominated or too small which can be revised to the “Rule of 2”.

2) There is one company, LTX Credence, that has been historically in the “ditch” for the past decade. They have a choice, become a specialist or languish with below average returns. The trouble with most Executives is that shrinking the firm in the course of specializing doesn’t align with their ego even if it means the outcome will result in making profit. So the bad news is that LTXC probably languishes with below average returns.And lo, you get headlines like this morning from them that their orders dropped off a cliff in the last quarter: http://www.forbes.com/sites/ericsavitz/2011/08/31/ltx-credence-issues-dire-fy-q1-guidance-shares-tumble/?partner=yahootix

3) Sometimes the hardest to rationalize is that an industry has reached maturity. I know this one from the inside given I grew up with the birth of modern technology era and innovation. Folks here’s a message for Tech Workers: the industries making up Tech have matured in general. The days of tabloid grabbing headlines are largely over, and it’s down to the day-to-day life of making healthy profit. The implications are harder to swallow though. No more “risky tech projects” with visions of huge gains. No more acceptance of an idea just because it sounds cool. Get used to having to rationally justify your ideas and projects in ways that show they MAKE MONEY! Hype and visions of grandeur will no longer sell ideas.

I’m no wizard at business but I did stay at a Holiday Inn. LOL! Actually, I just spent time gaining practical business wisdom and then applied it to a situation. See wisdom itself is not what’s hard, it’s the application of it to myself that is truly challenging.

Common sense can prevail

I saw an article this morning on Yahoo! news feed from AP:

Superintendent gives up $800K in pay  http://news.yahoo.com/school-superintendent-gives-800k-pay-150206667.html

Please overlook for the moment some of the glaring inconsistencies leading up to this such as: how in the world did he get a pay package that enormous to begin with? Since both my parents were teachers I have a natural affection to paying teachers what they are worth. But $800K for 3 years, that’s over the top. Which makes forfeiting it feel a tad less generous than the headline would seem.

None the less, the guy did do the right thing and it was his manner of doing it that caught my attention:

His move was so low-key, his manner so unassuming, that it took four days after the school board meeting for word of his act to get out to the community. There were no press releases or self-congratulatory pats on the back.


“When you make good choices, good things happen to you,” said Powell, who tends to talk in the kind of uplifting phrases that also make him a sought-after motivational speaker.

Now if only it would catch on!

There is a generation….

History repeats itself over and over again. As one generation grows from youth and then dies, the gains or losses they experienced don’t transfer to the next. It’s intuitive to see that people learn most from first hand experience which is unfortunate. I’m a history buff and World War 2 history in particular. There is a term coined for the people in America that fought and won WW II: The Greatest Generation. What made them “great”?

As I have reflected on that question I am of the mind that what made them great was not because they won the war. If it was limited to just winning, then the success of the United States the following 60 years would have been fleeting. Instead I believe that generations greatness was found in personal character built on morals that are immutable. Were they born with that or was it built from the ingredients of the moment, the time period they lived in? Again, fairly intuitive answer is they built it, each of them that were called to serve their country, one at a time through labor, sacrifice, and conviction. Put that together and in the face of world domination from two dictators the nation collectively said “This is not right!” and then were willing to do what was required based on that conviction.

Here we are 70 years from when WW II started and what are the ingredients of our time period, this era? I am gravely concerned what prosperity in the US has taught, or more correctly stated lulled, people of this time into. Character is mocked in favor of “group think”. Labor is marginalized in favor of a handout. Conviction is forgotten as the morals no longer matter.

Proverbs 30:11 begins four sayings from Agur about “there is a generation”:

  • Disrespects parents and authority (v11)
  • Self-righteous with no morals (v12)
  • Arrogant (v13)
  • Prey on the poor (v14)

And how many of these mark our present time and era? I dare say all four of them. A survey of teachers in 1945 asked what were the biggest problems in the classroom with top responses such as speaking out of turn, cutting in line, and running in the halls. Fast forward to 1995 and the same survey has responses of teen pregnancy, guns in school, drug and alcohol abuse. Why so much change in just 50 years? I’ll leave that for you to reflect on and find the answer for yourself.

What kind of generation do you want to be part of? A generation that builds character or watches it wither before your eyes? The greatest gift I can give the next generation is this: there are morals and character worth fighting for and that the greatest sense of accomplishment is found in knowing you’re right and willing to stand for it regardless of what “other people” think.

Find truth and build inner character based on conviction. It really does make a difference.

How’s that change working out?

I really don’t like politics. To me politics is equivalent with selling snake oil. And recently as I was reading some proverbs I came across this one and reminded me why I didn’t buy into the fluff of the 2008 Presidential election cycle:

21 My son, fear the LORD and the king;
Do not associate with those who are given to change,
22 For their calamity will rise suddenly,
And who knows the ruin that comes from both of them?   Proverbs 24:21-22

There are several fallacies that I’ve learned over my years with the proposition that all we need to do is change.

Fallacy #1 – Change is better than perseverance and endurance

Fallacy #2 – Change is without risk or negative consequence

Fallacy #3 – Change is better than where we are today

Fallacy #4 – The change to state is “good” and the current situation is “bad”

Fallacy #5 – Principles don’t matter, all we need is a healthy dose of change

Make no mistake that there are times when change is necessary and required. However, a Progressive mentality that constant change is required to “advance” and improve ignores basic intuition that looking before leaping really does work out for the better.