Steve Hopper's Profile

While I am generally very skeptical of company’s sustainability programs, I am actually less skeptical of Intel than most. The reason for that is their transparency around their stated goals. Their approach follows the SMART principle, which states that goals should be specific, measurable, attainable, realistic and time-bound. These goals seem quite specific and allows customers, suppliers and even competitors to hold them accountable.

Specific goals is a non-financial resource that Intel needed and thankfully did provide to their suppliers. Because it was done in such a public way, suppliers know that Intel is serious about achieving these goals. As such, if they do not partner with Intel to allow them to achieve these goals, it seems credible that they will be willing to change suppliers.

I tend to disagree slightly with Nick’s comment above that London’s reputation as a financial capital is irreparably harmed. As one of the big four banks in London, Barclay’s has decided to move the division that requires the most talent, investment banking, out of London. Additionally, HSBC has stated that they may be moving up to 20% of their investment banking roles out of London [1]. As Nick has pointed out, the “soft Brexit” seems relatively unlikely and organizations do not want to be left without the ability to attract top talent from Europe and thus will be making defensive moves to prevent talent exodus.

[1] Stephen Morris and Richard Partington. Independent. “Brexit: HSBC may move 20% of its London banking operations to Paris, chief executive Stuart Gulliver says. January 18 2017. “http://www.independent.co.uk/news/business/news/brexit-latest-news-hsbc-bank-move-20-per-cent-fifth-london-banking-operations-paris-chief-executive-a7532711.html” Accessed November 30 2017.

I thought this was a fascinating read regarding the game theory of protectionist policies. If I am an executive of Airbus, I can easily defend my argument by stating that I am now producing planes in the United States and providing for US jobs. If I am Boeing, it is difficult for me to respond given the DoC responded to my lobbying efforts. However, I could try to make the argument that the Bombardier and Airbus partnership is creating anti-trust issues, but this is a difficult argument given the lack of US based competition in airplane manufacturing.

This was an interesting read and I fully agree with Joe’s comments above. I believe a successful cyber attack is a question of when not if it will happen. I agree with your assessment that the USCG needs to consolidate training materials, but I do not believe this is enough. Just because information is available, does not mean individuals will utilize that information. Many companies are undergoing cyber security training by launching their own phishing emails to employees. If employees click on the link, then they are taken to a very short training module to learn more about protecting their organization against cyber security. Additionally, in the same way that organizations require all employees to participate in fire drills, I believe they should create responses for cyber attacks and train all employees on the proper responses.

To synthesize the comments from Imran and Paula above, I believe the incumbent players will have a difficult time adjusting to compete with Zara and H&M because of the cultural shift required. However, new start up can mimic and improve Zara’s approach.

On the incumbent side, we are seeing companies like Gap fire their design directors and rely on a data driven / fast fashion approach. However, they still have 8-10 week lead times relative to the 2-3 weeks that Zara has been able to achieve. This has required significant investment over a multi-year period and the journey is still ongoing.

However, other new starts up can mimic and improve Zara’s approach relatively easily. We are starting to see a proliferation of “clothes in a box” companies, similar to Trunk Club, that skip the retail store experience all together. By understanding customer preferences, and shipping directly, these online only start ups are able to shorten the lead time from runway to store and think about their design process from runway to customer.

I fully agree that it makes sense to outsource a procure-to-pay system to somebody like SAP Ariba or Coupa. In addition to the supplier consolidation which will drive lower raw materials costs, a procure-to-pay system can offer supplier consolidation on indirect goods (e.g., all non-product related materials required to operate the business). While consolidating spend to negotiate a lower rate can drive significant savings on indirect spend, another significant lever is demand management (e.g., reducing total spend all together). Through a system such as SAP Ariba, procurement, in combination with the business and finance, can establish a spend control tower that will effectively govern spending thresholds throughout the organization and help companies adopt a zero based budgeting mindset to lower overall cost.

Paula – I enjoyed reading your article on H&M. I agree with Matt Michel’s point above that as a fast fashion company, H&M’s profits are driven by high turnover of their customer’s wardrobe. As such, fast fashion has led to more clothes being produced and accelerated the negative impact on our environment. I believe that H&M’s water initiative is impacted for two self-serving reasons: (1) to avoid negative public perception surrounding the environment (e.g., avoid Nike fiasco) and (2) to increase regulatory standards that increase barriers to entry. Given their meteoric rise in a declining sector, H&M and Zara have seen several competitors mimic their fast fashion approach. By establishing themselves as the fast fashion player, and then preventing new entrants through high regulation, H&M is able to sustain their position in the market.