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The World Is Flat

April 30, 2006

Filed under: review — Terry Wohlers @ 14:15

I recently finished the The World Is Flat by Thomas Friedman. The book provides a perspective that almost anyone in the high tech field would find interesting, and for some, fascinating. The research and preparation of ideas that went into the book gripped my attention from beginning to end. 

Friedman argues that the rules of business have changed in an era of globalization. He explains that a convergence is underway of new players (India, China, Russia, and others) and new playing fields that have led to a horizontal collaboration of products and services. “The world has flattened,” Friedman claims, and many forces have caused this flattening. Among them: The fall of the Berlin Wall and Soviet-style economies; the 1995 Netscape IPO that led to easy Internet browsing; the dot-com bubble and overinvestment in fiber-optic cable that has linked India and China to the rest of the world; search engines such as Goggle (most queries are no longer in English); and wireless technologies that permits unprecedented connectivity, even from a bullet train in Japan. (Last October, I used Lufthansa’s new on-board high-speed wireless Internet on a flight from Frankfurt to Johannesburg.)

Friedman takes you to Bangalore, Guangdong, and other parts of the world as he vividly describes how the world is a very different place. For example, an estimated 400,000 American IRS tax returns were processed in India in 2005. Likewise, Indian and Australian radiologists read medical CT scans from small hospitals in the U.S. He also discusses how the flattened world has become a friend to highly organized terrorist groups such as al-Qaeda. 

The World Is Flat is a intriguing account of the threats, opportunities, and realities that we face today and in the world to come. The book is not without its flaws, according to some critics, although I agreed with most of what was presented and was eager to advance from chapter to chapter. I recommend it highly, especially to those with jobs in new product development and manufacturing. 

CEO Salaries

April 17, 2006

Filed under: life,money — Terry Wohlers @ 08:20

According to USA Today, many of our nation’s CEOs are doing just fine, financially. The median salary for chief executives from the 100 largest companies rose 25% to $17.9 million in 2005. This compares to a gain of 3.1% for typical American workers. The CEOs of small to midsize companies received pay that was similar to or exceeded that of large companies. 

How well did some of the CEOs do last year? Oracle’s Larry Ellison was given $74.2 million. Starbucks chairman Howard Schultz, $42.5 million. Autodesk CEO Carol Bartz, $28.9 million. Domino’s Pizza CEO David Brandon, $25.2 million. Corning chairman James Houghton, $7.4 million.

And others? Sporting goods retailer Cabela’s CEO Dennis Highby, $2.3 million. American Express CEO Ken Chenault, $16.3 million plus other bonuses. Capital One Financial CEO Richard Fairbank, $249 million in exercised stock options. Cadence Design CEO Michael Fister, $3 million in compensation and options valued at up to $23 million.

What will these people do with all their money? One year of pay is more than most people could spend in a lifetime. My hope is that it is given to charities, disaster relief funds, student scholarship programs, and other places that help those in need. Perhaps if those of us that make far less could set an example for them, they will follow suit. One can only hope.

Working from Home

April 3, 2006

Filed under: life — Terry Wohlers @ 07:23

If you make a reservation with JetBlue Airways, chances are very good that you will speak with someone working from home in the Salt Lake City area. That’s because 80% of all JetBlue reservationists work from home and live within 40 miles of the JetBlue’s support center in Salt Lake. When the airline was launched in January 2001, JetBlue CEO David Neeleman allowed all 40 reservation agents to work from home, and work part-time. Today, 1,200 of the 1,500 agents work from the comfort of their homes.

Twenty years ago, it was somewhat taboo to telecommute or operate a business from the home. Not today. Thomas Friedman, author of The World Is Flat, found that people are 30% more productive when working from home. He claims that 16% of the U.S. workforce is now working in a residence. A recent survey by JupiterResearch showed that 24% of U.S. workers telecommute at least part of the time.

High-speed Internet connections and wireless handheld devices make it easier to circumvent the traditional office. When working from home, the commute becomes very short—usually measured in seconds—and you save fuel and reduce traffic and pollution. Also, you don’t have to spend as much time getting ready for work. Just last week, a manufacturing consultant told me that she routinely conducts important business in her pajamas. (Okay, that’s probably more information than we need.)

Friedman calls the trend “home sourcing.” I see it expanding to the point where niche, short run, and custom manufacturing will occur in homes. As the price of additive fabrication systems declines, it will become appealing for entrepreneurs to apply the concept of rapid manufacturing in a spare room, basement, or garage. The overhead will be minimal, yet there’s little reason why product quality and customer service can’t be among the best available anywhere.

Margot Miller, manager of reservations at JetBlue, said that people tend to be more productive in their own environment and most people like to work at home because it saves time and it’s easier on their families. My experiences reinforce Miller’s views.