The real forest fires of 2012: One Story

Photo By John Newman

A college friend of mine, Mike, is more concerned about the real forest fires (wildfires) these days. His neighborhood was partly destroyed by the Waldo Canyon Fire in Colorado Springs in July. His home escaped the fire that completely burned 56 homes in his neighborhood. His home was a few streets over from the burn area. You’d think that means his family was back to normal, but it was not.  His family was displaced for two months due to the soot and smoke that infiltrated his home. While 56 homes in his neighborhood, and over 350 homes in the Waldo Canyon fire were burned, there were many times more that suffered soot and smoke damage. And many more where the temperatures inside the house melted appliances, pipes and the like. And now he tells me that the burned mountains will not hold the water and he might see flooding of his home in a years time. Colorado was hit pretty hard by the wildfires this year.

I had a chance to see the neighborhoods up close when I visited last in August about two months after the fires were extinguished. Whole neighborhoods were destroyed, houses were reduced to ashes and then the ashes were reduced to ashes. So many personal lives disrupted. As I visited, I noticed the inevitable signs of regrowth. There were construction vehicles and equipment on every block. The houses and infrastructure will be rebuilt and the neighborhood will be different. Some neighbors will be back. Others will not.

In looking at the damage, I was not surprised that there were many vehicles that were destroyed in the fire. From afar, it is easy to ask why would people leave their vehicles in harm’s way when they could have easily moved them out rapidly? Of course they could, given enough warning. The warnings were a bit shorter in the case of the Waldo Canyon fire because of the fast-moving firewall. But the warnings were still there in time for people to gather up possessions and flee in their cars. All the cars. But some were not prepared or thought they had more time. And then by the time they reacted, it was too late.

This is the issue with the digital forest fire in business. Some businesses do see the fire in the horizon, but think they have enough time to adjust to it or that the fire will miss them. Sometimes this is just wishful thinking. Modern businesses must assess how changing technology will affect them. If they cannot think clearly about the implications, then they should result to seeking the advice of third-party individuals who can call the future without prejudice.

Think about your business. How could changing technology affect you? I read a story about how drivers licenses may be obsolete by 2040, since car makers are already making cars that could drive themselves. If you are a drivers training company, how would you react to this? How should long haul trucking companies or taxi companies adjust? Of course, this is a long way off, but there are other technologies that will impact in a shorter time that companies should address now. How will micro payments by smartphones affect your business? As advertising continues to shift  from traditional media such as terrestrial radio/TV and printed newspapers, how will this affect your business? These are just some of the questions each business must answer for themselves. And they must do it in time be able to successfully react.

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A look backward at the progression of technology.

I turned 61 this year, and my consulting business partner, Steve is in his 70′s. I worked with Steve at 3M and then at the spinoff of 3M, Imation.  In that time, I have worked exclusively in the high technology industries of computer, audio/video, medical imaging, and document management. This has given me perspective of the changes in technology over the years, and lead to the introduction of the concept of the digital forest fire.
As I look back on that, I can remember when we (at 3M) got the first two Betamax recorders shipped from Sony so we could develop the tape for the machine. I can recall working on the standards committee for the first ever digital television tape recorder. (We felt television was a more descriptive word than video, since we were recording more than video.) I can recall going to one of the 3M libraries to use a computer terminal that accessed ARCHIE, VERONICA, and GOPHER, all early versions of the Internet, and hoping that the server on the other end of the line would be up so I could access the information on it. (They were not up and running often.)
A friend of mine and I were having lunch the other day and contemplated those changes. “Suppose we could travel back in time to around 1975 and talk to our past selves about the next 35 years.” In 1975, none of the following existed outside of development labs and experimental hobbyists: home video recording, optical discs, Internet, home computers, and cell phones. I was just one year past graduation with an electrical engineering degree. What would we say to our past selves? And would we believe it? The advent of computers has changed nearly every industry in profound ways. The Internet, made possible by the advent of economical computing, has made similar strides.

What is the source of the digital forest fire that burns industries? I guess the one common theme I see is that the computer has been able to be cheaply morphed into a variety of products. Need a typewriter, calculator, or TV set? The computer can be all three. In one piece of equipment. Prior to home computers, each of us would have to buy that item separately. And companies would design, build and sell separately. Take photo printing for example; In the past, the equipment to make high quality photo prints required an investment of tens of thousands of dollars. In the early days, you pretty much had to be a chemist to make good photo prints. In later years, technology made the equipment much simpler to run, but still outside of the pocketbook of the average consumer.

Enter the digital era. Now you can buy a printer for less than $50. At 20 cents a photo, that is the price of 250 4×6 photos. Of course, that is not entirely correct, as the current printer model means a below cost price for the printer and all the profit comes from selling ink cartridges. So the real cost of a photo today is the paper and ink cost. But the main point is, now the consumer can print photos at home and not have to go to the drug store or photo shop to get prints. This is not only cost effective (you print only the photos you want) but time effective (no more trips to have photos developed.)

I am continually amazed by the capability of the smartphone. This little tool, that fits easily into my pocket gets carried everywhere. It is not just my phone, or connection to the internet. It is my flashlight, ruler, time waster, note taker, camera, voice recorder, … well you get the idea. It is really a very small computer. And there are now hundreds of thousands of programs or apps that run on it.

We have had so much change in the last 20 years, especially due to the development of the Internet, that one might think we will see a slow down in development. I am fairly certain we will see even faster technological change in the next few years. A faltering economy might slow things down temporarily, but we have not seen anything yet. I can imagine myself at 81 wanting to advise this 61 year old on what was going to happen in the future. And I am pretty sure this 61 year old would have trouble believing some of it.

 

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Lessons from the Titanic and Ocean Liner Industry

This is the 100th anniversary of the sinking of the Titanic on its maiden voyage. I am writing this while on a cruise ship sailing to the Caribbean. I just can’t help comparing this ship to that fateful ship. And comparing technology and where it has taken us in the last 100 years.  In 1912, we did not have digital technology. Well not unless you want to consider the electrical switch.  On equals one and off equals zero –digital.

But consider this… In 1912 we already had airplanes, automobiles, wireless communication, recorded music, motion pictures, electric lighting, railroads, central heating, and a lot of other inventions designed to make living easier for humans. And we had huge passenger ships capable of transporting passengers while housing, feeding and entertaining them.
The last hundred years, we humans set about improving those inventions. I wonder what Thomas Edison or Henry Ford would think of their industries if they were alive today.  They might be amazed or they might wonder why technology has not progressed farther.
In 1912, it would have been difficult to see how the mighty ocean liners were direct competitors to the airplanes.. It would have been easy for the owners of the White Star Line to think of the airplane as not more than a mere novelty and in no way would it replace their transatlantic passenger and cargo business.. But we know from history that it did. The ocean liner industry was in the business of carrying passengers and freight over vast distances over water. Airplanes could not travel far and could carry little weight back in 1912. But airplanes also could carry passengers and freight. All they needed to do was extend distance and carrying capacity, which steadily increased over time as technology improved.
The ocean liner industry found themselves competing with airplanes by the 1950′s. But it too a long time for the business to move to the faster alternative. And today’s cruise ships are not in the business of transporting passengers from continent to another. They are in the business of providing transport from one vacation port to another.  The industry successfully was able to move into a market that was not likely to be poached by the airline industry.
Today’s businesses are not so lucky. The technology progresses in months or years rather than decades, and industry titans can see their business erode in a relatively short time. One lesson still holds true today. Your competition is not companies that that make the same widget as you, but rather all competitors that serve the basic need. This is why a company like Heidelberg, manufacturer of four color printing presses, might not see how a tablet device connected to the Internet competes.  But both systems are used to communicate ideas to an end consumer.  The tablet and Internet can do it faster and cheaper.
As we remember the sinking of the Titanic, and the devastating loss of life, let’s remember that today’s businesses are but one step away for disaster, with less and less time to react if they do not remember what the basic need of their customer is and watch it for developments to improve delivery of that need..
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Goodbye Britannica, We Will Miss You!

I remember two experiences with Encyclopedias. First, I remember when our family purchased the red leather bound 1961 edition of the World Book Encyclopedia. It seems that every suburban family with school aged kids had a set. They were popular with the urban and rural families as well. As time went on, our family purchased the annual updates, and I can remember pasting in the cross reference tabs into the main encyclopedia set. The set was really the way to learn about subjects we studied in school and to just learn about random things. Every page had something of interest, and many pages had color photos. Back in those days, who could ever think of anything that would replace that set in the future?
Fast forward to 1987. The Minnesota State Fair. I remember it well, as my girlfriend had become my fiance after a special dinner the night before. We were there because the Jets were giving a concert at the fair. My fiance was traveling with the band because she was tutoring the lead singers. We were there for the concert and so she could show off her ring to the band members.
We took a stroll into the grandstand exhibits and there, as usual, was the Encyclopaedia Britannica booth, selling their various bound versions of their product. At the time, I was working at 3M and we had already begun working on the recordable CD as a product. Its capacity at the time was limited to 640 MB. Music CD’s were growing by leaps and bounds at that point, but the idea of that much storage for a computer was considered way too much. But I knew the capacity was enough for an encyclopedia, or at least a condensed one.
So I asked the salesman, “Are you planning to put this on a CD-ROM?” He looked at me and blinked. He said what is that? I told him it was like a data version of a music CD. He had never heard of that, and probably dismissed me as out of it. I explained what a CD-ROM was to my fiance, who had been listening, and then added, “They won’t sell a lot of full sets in the future.”
Fast forward to around 1993. We had two kids by then. My wife started talking about getting an encyclopedia set. I said, well first the kids are too young and it will be out of date by the time they use them, and second, the encyclopedia is coming out in CD-ROM. (In fact, there were several by then — Compton’s, and Grolier’s were two of them and they usually came with the purchase of a computer for no extra cost. So we did not purchase one.
The reason for all of the background is that the announcement by Encyclopaedia Britannica that they are phasing out the manufacture and sale of the printed sets. Oh, they will still have the content online, but you will not be able to purchase the printed version after this year. They are doing this after 244 YEARS of publishing. Now there is a digital forest fire of a long time coming! According to the CBS News Tech Talk article, the peak year for printed EB sales was 1990 at 120,000 per year. By 1996, they were selling only 40,000 sets per year. And now, the number of printed copies sold is negligible.
Funny thing is, by announcing it is the last version, they will likely sell more printed copies this year than all of the last 5 years combined. Yes, some people want to hang on the history and won’t want to change to reading electronically. . You can check out their surviving edition, the online version at http://www.britannica.com. You can still order the last of the 32 volume 2010 print edition, at $1395. Or you can buy the 2012 DVD edition for $29.95. (Hmmm, I wonder when we will see the last of the disc version? I can see the glow of the digital forest fire for that product in the distant haze.)

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The Once Mighty Kodak

This iconic logo signified a very strong brand in the past.

When Steve and I were at 3M Company in the 1970′s and 1980′s, we knew we worked for one of the great American companies. Our division manufactured and sold audio and video recording tape. Our sister division sold data tape and discs. When I joined in 1974, 3M was dominant in all three markets. Kodak was our peer company, that was, at that time even more dominant in their field, the photographic film industry. Brand awareness of Kodak was much greater than 3M. And nearly everyone purchased the film for their cameras in those little yellow Kodak boxes that were sold everywhere. Most of the the employees at 3M knew and revered Kodak back then, and we were hoping someday that 3M would be as respected and had the brand recognition that Kodak had achieved.
But there was a difference in the way both companies grew over the years. Kodak was founded on film, and through the early decades, continued to focus the company on film and film based products. 3M, was founded as a company that planned to mine abrasives and manufacture sandpaper. From the early days, 3M began to diversify its product line, from sandpaper, to adhesive tapes, to chemicals, recording media, film, office supplies, telcom products, copiers, pharmaceuticals, medical supplies and others. This seemingly endless array of products came from several technology bases. Kodak, on the other hand continued to focus on film. Film for photos, motion pictures, medical imaging, and the print paper, photographic chemicals and equipment that used the film. In the 1970′s and 1980′s, Kodak started to diversify, recognizing that newer technologies were encroaching on the growth of their company. One of the products they began to make and started selling in 1984, was video tape, a product that competed directly with our products at 3M, rather than indirectly with their film products. Kodak entering our market was big news to us, and with their strong brand recognition, we worried they might take significant market share from us. But we noticed right away that their sales force was not too eager to sell tape, which they had been selling against for years. It became all too apparent that Kodak management had entered a business that the rest of the organization did not have the heart to compete in. And management did not correct that problem, signifying that the top brass was not focused on the coming digital forest fire at that time.

When a neighborhood sees smoke on the horizon, and learns that there is a forest fire, there is a period of denial that exists. “It won’t get to us.” “The fire fighters will stop it.” “We will have time if it really threatens.” So homeowners do little or no preparation. When they finally realize their home is likely to burn down, they swing into action, often too late to save much of anything. Such must have been the case at Kodak. Oh, they marshaled some of their efforts toward the new digital industries, but they never really made it top corporate priority until the fire was close to their doorstep. For Kodak, the digital fire on the horizon was pretty small in the early 1980′s. Had they recognized the fire would eventually destroy their company, they would have had sufficient time to redirect their company. But by starting late, the options available to you are limited and the risk to the company is greater.

Here is an experiment for our readers. If you are older than 30, ask persons younger than 25 to explain what the Eastman Kodak company stands for.  How respected is the company in their eyes? What products do they make? What does their logo look like? What is the dominant color of their logo? Are products made by Kodak the highest quality? If you are younger than 30, ask  someone older than 35 the same questions. You will clearly see a difference in brand equity. Then report back in the comments your findings. We look forward to hearing from you.

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The Digital Forest Fire Burns Bright in the Field of Education

College Classroom, 2010

I (Bob) had a recent conversation with a university professor from Nebraska about the changing state of education. Education is changing due to digital technology from various directions. This is somewhat similar to an area being threatened by a real forest fire from two or more directions at once.

As readers of this blog will understand, the books are becoming digital. The professors and students tools are digital (laptops, netbooks, smart phones, digital cameras, and tablets.) And student and professor deliverables (homework, grades, tests, etc) are digital. But there is more change than that. The proliferation of media content has changed both the way professors teach and how student and professor research is accomplished.

Today’s college students require their professors to keep their interest, so they will pay attention enough to learn the lesson content. This is harder than ever, as today’s students have been entertained with digital media (TV, iTunes, Netflix, Pandora, etc) since they were old enough to sit upright in a chair. The professionally developed content they have been watching for years has high production values, and high energy. This contrasts with the media Steve and I had growing up in the 50s and 60s, which was largely books, magazines, part time black and white TV and the radio. So today’s student sits in a classroom, divides his or her attention between smartphone texting or browsing the Internet, and catching a portion of the professors talk when interest spikes.  If the professor just delivers a verbal monologue, the students will capture little to none of the lesson. If this is augmented by a text only Powerpoint, the capture will be only slightly more. If graphics are added, a bit more. Well, you can see where this is going. So if a professor wants to capture today’s minds, and limit competition from the phones, they will have to be entertaining as well as informative. This demands presentations with high production values.

Here is an example of Matthew Weathers, a professor that understands this well. He is a math professor at Biola University in La Mirada, CA. He teaches a course in The Nature of Math, to students who often do not have a great aptitude or interest for math. So how does he capture the attention of his students while teaching real and imaginary numbers?  Follow this link and find out ==> http://www.youtube.com/watch?v=aP4fWMLofvo

This mini lesson is quite clever, and required time to shoot, edit and rehearse. And these presentations last less than ten percent of the day’s class time. I am quite certain that few if any of his students were splitting their attention between their mobile device and him. that he would win out during this time. Imagine if every professor had to do this level of production for their classroom in order for their students to learn. Professors now show a lot of content from DVD’s or from the Internet to augment their style of teaching. They are concerned about keeping the interest of their students. This is one aspect of the digital forest fire on education.

Another aspect is the way education is delivered. In the past, prior to the advent of low cost AV media, education was delivered by teachers in a classroom setting, augmented on occasion by filmstrips, or 16mm film. Low cost video tape changed that, and allowed the distribution of educational materials by VHS, and later DVD. But today, educational content can be delivered more inexpensively by distribution via the Internet.

According to CampusTechnology.com, 12 million post secondary students were taking some of their classes online, and that this was expected to jump to 22 million by 2014. This is a trend that is likely to have massive impact on the worlds colleges and universities going forward. If most of the classes are taken online, what will the campuses of the future look like? Chances are they will need to be downsized substantially. Are these great institutions of learning preparing for this? I doubt it. In fact, as I researched articles about trends in building for the future of education, it was all about high technology, green/sustainability construction, student amenities, and similar issues, not about trends toward downsizing. These institutions are not unlike the homeowner, seeing the orange from a forest fire over the hill, and not making preparations since they believe it won’t reach them. Yeah, denial is not the river in Egypt.

I believe there will continue to be major changes in the way education is delivered, and that many of today’s institutions of higher learning are not ready or willing to address those future changes aggressively. They are flirting with the digital forest fire. These sea changes will profoundly affect all levels from pre-school through graduate education.  We will further explore the digital forest fire effect on education in future blogs.

Steve and I would like to hear from you. What aspects of changing technology would you like us to explore? How has changing technology changed your work life? Your personal life? What trends do you see? We want this to be a dialog, not a monolog!

Enjoy your day, and keep yourself from being burned by the digital forest fire.

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iPad Responsible for Killing Jobs in the US?

Last Friday, April 15, Representative Jesse Jackson Jr. (D-IL) made a speech on the house floor about jobs. In his passionate speech about Congress not creating one piece of legislation that improved the jobs situation, he said, “A few short weeks ago I came to the House floor after having purchased an iPad and said that I happened to believe, Mr. Speaker, that at some point in time this new device, which is now probably responsible for eliminating thousands of American jobs. Now Borders is closing stores because, why do you need to go to Borders anymore? Why do you need to go to Barnes & Noble?.” He went on to describe how jobs at bookstores, books, newspapers and magazines are being lost. And certainly he is right. Those jobs are going away. In our previous blog we talked about the magazine industry. Obviously a lot of jobs were lost in that industry due to the digital forest fire. But there are a lot more kinds of content than newspapers, books, and magazines. This affects the music, spoken word, movie, and photography industries, to mention a few. They are all affected by the digital forest fire. That is the real cause, not one product.

There are remedies to the job shrinkage. The American sales clerk at Borders might become a sales specialist at Apple Retail, with the right training. The American book manufacturing worker logically will not become the Apple factory worker in China, but again, training for a new job that has growth prospects would be a better response. Mr. Jackson should pinpoint the digital forest fire trend, rather than one successful digital product. And he should realize that there will be improvements to the current digital media products, and the programs and communications to connect them, that will cause more job shifting.

Like the iPod, the iPad is a rare American symbol of international product success. Let’s not bash a productivity enhancement product made by an American company, and largely designed by American workers, who require manufacturing and assembly in an Asian country to keep the cost low enough to be profitable for the company, and affordable by the masses. Rep. Jackson is pointing out a symptom and not the cause, and this is never the right way to solve a problem. The cost of manufacturing in the US has made it difficult to compete with manufacturing in other countries. And if Rep. Jackson were really up on things, he would know that a lot of manufacturers in China are now moving to even lower cost countries like Indonesia, Malaysia, and Vietnam. Those jobs, for very low margin products, are unlikely to come back to the US for manufacturing. Let’s get the displaced workers retrained for the jobs of today and tomorrow. Health care, environmental sciences, alternative energy, and e-commerce are some of the American growth areas for jobs. The displaced workers have a responsibility also; they must take action and find the right industry for them and invest the time and effort to become retrained.

These are serious issues for the American worker and the American government, as well as the rest of the world. And policy makers in both businesses and government need to adjust their strategies based on the continuing digital forest fire.  We would love to hear your comments on this and the other blogs. Please comment.

In case you would like to hear the speech from Rep. Jackson, here is the link from RealClearPolitics.com. http://www.realclearpolitics.com/video/2011/04/15/rep_jesse_jackson_jr_blames_the_ipad_for_killing_jobs.html

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