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On November 20, 2016, Janick commented on 360° View of the Citizen: Digitally Enabled Social Services :

One of the most common critiques to public institutions around the world is their failure to adopt more efficient and accurate technologies, despite the fact that private companies have been using them successfully for years. I personally find it unacceptable to have critical public institutions rely on paper documents to operate and make decisions, especially in a first-world and wealthy country. I can only imagine the time waste of having employees search for paper records, as well as the many mistakes that lack of integrated systems can generate: false records, double-payments to the same person, and even non-payments to citizens that were entitled to a service.

I do see, however, your concern in change management. Even with general consensus that a public institution needs to go digital, these organizations have tremendous resistance to change and inertia. How can citizens and governments make sure that their institutions change their operating model towards a digital one?

McKinsey’s approach to change management lays four pre-conditions to change mindsets and behaviors that could be applied to British Columbia’s Social Services. First, public employees need to have a purpose to believe in. They need to understand why the new system is needed, what is the benefit for citizens of such a change, and what is in there for them. Second, we need to ensure that companies have the skill-sets needed for change. How can we ask a public employee to use a digital system if they can’t use a PC? As you mentioned, teaching technology to non-experts can be pretty daunting. But it can also be done. And even if it’s impossible to change some, maybe is time to think about renewing the workforce with people more apt to the challenges of today? Third, employees need consistent role models. British Colombia needs everybody in the chain of command, from the most senior politician to middle managers, adopt the new technologies and share their example with their colleagues. Finally, formal reinforcement systems need to be put in place. For example, British Columbia could establish payment incentives to employees that successfully go digital. Promotions and layoffs could also be tied to minimum digital competency and usage levels. Also, statistics of digitization and costs savings could be published regularly for the general public to scrutinize.

In short, it seems like British Columbia is going in the right direction, but they need to double-down in change management to realize the increases in efficiency and accuracy of its systems.

[1] http://www.mckinsey.com/business-functions/organization/our-insights/the-psychology-of-change-management

On November 20, 2016, Janick commented on Wahoo Fitness: Riding the Digital Wave :

We typically see digitization as the opportunity of small-players to disrupt industries and become new leaders in their space. However, Wahoo highlights how digitization can also be a double-edged sword: yes, digitization allowed a small company to enter a traditional space, but doesn’t it also mean that a new player could enter at anytime and take away Wahoo’s share? Yes it does.

That is why Wahoo needs to think very well about their strategy. What is the market need that they solve, what are their fundamental competitive advantages, and which products or services better leverage those advantages in the marketplace. With this perspective, I wonder whether Wahoo has any true competitive advantage in the hardware space? Yes, they might be first movers, or offer the most complete and integrated piece of hardware in the market. But, what prevents established fitness hardware giants such as Life Fitness or Precor to enter the same market, leverage their brand, sales, and marketing power and crush Wahoo? What can Wahoo do that the incumbents cannot?

With that view, Wahoo could instead position itself as the leading fitness data integrator, that can connect to all the big fitness data platforms, both proprietary and open (e.g., Nike, Mobile Running Apps, etc..). They are already entering this realm by interconnecting its products with other providers. They could secure partnerships will all major fitness data providers, generating network economies difficult to copy. Then, they could put the best data-scientists, doctors, athletes, and physical trainers to create proprietary added-value on top of their data, such as personalized training and health programs.

This is only a suggestion and could depart too much from Wahoo’s current capabilities and competitive advantages, but they should definitely think over this big strategic questions to make sure that their own approach is successful and resilient to potential new entrants.

On November 20, 2016, Janick commented on The Climate Corporation: Making it rain, game recognize game :

Thanks for this article, which is extremely relevant for humanity considering the world’s current demographic trends. The United Nations estimate that population will increase from 7.3 billion today, to 9.7 billion by 2050 and 11.2 billion by 2100. Moreover, about half of that growth will come from Africa. [1]

With that in mind, I wonder how far are we from applying digital technology, such as Monsanto’s The Climate Corporation, in African rural areas? What kind of private and/or public initiatives are needed to ensure that these sectors, laptops, mobile phones, and training reach to the most needed segments of global population?

[1] http://www.un.org/en/development/desa/news/population/2015-report.html

On November 20, 2016, Janick commented on Streetline – Leading the way for ‘Smart Parking’ :

Thanks for this post. I certainly can see the benefits of using streetline, both from the driver and city perspectives.

As a driver, its a great way to increase efficiency and predictability. Knowing exactly to which parking spot I am driving and getting efficient traffic directions saves time. Knowing in advance that the parking spot will be available and at which price, increases predictability. Seems like a must-have app for heavy parking users.

As a city, I think there are further benefits than what you described. From what I have seen, drivers looking for parking spots usually behave erratically and clog the streets by driving really slow on a lane. Given that a single driver’s behavior can create devastating ripple effects on a high-traffic transit system, I wonder whether a significant portion of traffic jams could be eliminated by using streetline on high-density urban areas?

Another idea is to use this data to provide transparency to the public of how parking spots, which are paid by citizens through taxes, are being utilized. I can imagine stats on average revenue per parking spot, % utilization, average availability, CO2 saved, time saved to citizens due to faster parking, time saved to citizens due to less traffic, etc…

On November 20, 2016, Janick commented on Sony’s struggle with Music :

Thanks TN from this article. In my opinion, Sony is yet another example of how digitization fundamentally accelerates and intensify competitive dynamics. It took Sony less than 20 years to go from indisputable leader in the portable music space, to an unknown player. And Sony is not alone. Many other deeply established firms and industries fell to digital newcomers: Blockbuster vs. Netflix, Britannica Encyclopedia vs. Wikipedia, Taxis vs. Uber, etc… All these exemplify how a small and young start-up can come out of nowhere and snatch a market from its leader.

Although I agree with your view that cross-functional integration is important to take new digital opportunities, I also think that incumbent companies, like Sony, need to play defense as well. Companies like beer giant AB InBev, with its ZX Ventures program, have spend significant resources and talent into having internal innovation machines that are constantly seeking for new products and services, as well as monitoring the market for new companies that could disrupt their industry. Even if the company is too slow to react to the market, they could at least acquire newcomers and lead industry changes, instead of falling prey to them.

On November 6, 2016, Janick commented on Delta Airlines and climate change: one-way ticket? :

Thanks BJF for your comment. I do not see carbon neutrality as inherently bad. I believe that we, as a planet, will be fine if we reduce overall CGH emissions to a sustainable level, regardless of its sources.

My concern is more general. It seems that too many industries are choosing to “neutralize” their emissions via stakes on carbon bonds, or similar instruments. I wonder, however, are there sufficient such instruments for every industry? My intuition is that if we want to achieve global sustainability, at some point we will need to make fundamental shifts in how our industries operate. I don’t know for sure if airlines will be one of such industries, but considering that potentially feasible travel alternatives are being developed, it might be worth the try.

On November 6, 2016, Janick commented on Going Green? Eat a Snickers. :

Thanks for this interesting article. Although I see your point of Mars having a long-term strategy on its Cocoa sourcing by helping its farmers increase yields, I don’t see how that would prevent the underlying climate change trends that impact their business model.

Although Mars might be able to maintain raw materials sourcing as desertification and climate change advances, these same trends could have devastating effects on other industries, the economy, and ultimately Mars’ customers. Of what use is having fresh Cocoa beans if there are no consumers for our product?

Although I do appreciate Mars’ initiatives towards sustainability, and I agree that the world would be a better place if more companies would follow Mars, I wonder if these initiatives are really enough?

On November 6, 2016, Janick commented on Clean Tech VC: A Decade of Failure :

Thanks for this article. Looking at these poor VC investment results, makes me extremely worried. Could it be that investing in clean technologies is simply non profitable? If that is the case, the implications would be massive: it could mean that global warming is not a problem to be solved by the private sector.

If that were the case, what would be the best course of action to ensure that the climate change problem is tackled? Who would be responsible for taking charge of this massive issue? Could we rely on governments and NGOs to solve this issues by their own initiatives? Do governments need to take measures that make clean investments more profitable, and encourage investors and operators to dedicate their resources, talent, and time to ensuring global sustainability?

Thanks for this article. I can see your point that UIHC has consistently insured property in regions that are highly exposed to eventual climate change, in which competitor insurance companies have decided to retreat. This could certainly indicate that UIHC is plainly ignoring climate change consequences and, hence, taking on far more risk than reasonable.

However, let me present an alternative and more cynical interpretation. What if UIHC is perfectly aware of climate change’s risks? What if that is the exact reason why they are investing in high-risk regions? What if current corporate incentives favor this kind of risk? Let me explain.

I would imagine that homeowners in high-risk areas would find it increasingly harder to insure their homes. Insurance companies would either deny coverage in this areas, or charge prohibitive rates. That, until they find a provider that is willing to insure at competitive rates. I would imagine that, because of this reason, UIHC would quickly become a market leader and grow at astronomical rates. As long as no major climate disaster occur, this would mean tremendous profits to UIHC, which could be distributed to owners as dividends. Once the dividends are paid, that money is gone. If at some point things turn sour, and a major climatic event happens, UIHC would simply go bankrupt. Can someone really sue them for fraud? Can someone really know what the real risk was? Maybe they did their best risk-assessment effort, but just failed to estimate very difficult to know parameters.

On November 6, 2016, Janick commented on Additive Manufacturing Revolutionizes Aerospace :

Very interesting article. I was not aware of the level of sophistication that additive manufacturing has reached, and the amounts of operational savings that it could generate for an airline.

One thing that caught my attention, is that a single nozzle can increase fuel efficiency by 15%. What’s impressive about this number is that a single nozzle could generate the entire fuel efficiency savings that IATA mandated from 2009 to 2010! (11 years in a row of 1.5% fuel efficiency gains are equivalent to a single year of 15% efficiency gains).

Another takeaway, perhaps more ironic, is that additive manufacturing of sophisticated aircraft components is a threat to the airline industry itself. Today, breakdowns in manufacturing plants many times represent a lucrative opportunity for airlines: complex equipment needs to be manufactured at the vendor site, and then carried via air to the client’s site. With hour minute that passes without the spare part arriving on site, the manufacturer is losing production. Thus, manufacturers are willing to pat high sums to air carriers to fly-in components. How much of a hit would the air cargo industry take if now complex components could be just manufactured in site using vendor specifications?

On November 6, 2016, Janick commented on The Climate Change Challenge for Institutional Investors :

Thank you for this very interesting article, which made me think on the broader role of institutional investors towards climate change.

Funds like CalPERS hold tremendous power to shape our future economy. As you mentioned, institutional investors make investment decisions (i.e., they choose whom to give and not to give capital to) and can take active positions as shareholders (i.e., they can demand specific initiatives from their portfolio companies). These two mechanisms, combined with huge warchests gathered from working individuals, give institutional investors tremendous influence over companies, and thus over entire industries.

With such power, it is reasonable to wonder: Is CalPERS mission solely to maximize returns for its pensioners? Or should CalPERS also seek other initiatives that would be well regarded by pensioners, such as helping stop climate change?