Thursday, December 11, 2008

Vital Signs: December 2007 was peak of US Economy according to NBER

Straying away from any specific company for this post but looking at the vital signs of the economy, the National Bureau of Economic Research (NBER) met on November 28, 2008.  The committee determined that "a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months."

A few other excerpts from the report illustrate the NBER's decision-making and key metrics:

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee believes that domestic production and employment are the primary conceptual measures of economic activity.

The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment. This series reached a peak in December 2007 and has declined every month since then.

The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession.
More details on this pronouncement are found here.

The most important next question on executives' minds is how long will the recession last? There is clearly not an easy answer as evidenced by a recent poll in Future Tense.  The article summarizes a recent poll of executives, 16% of which believe they are in the dark when it comes to forecasting future revenues!  

Friday, August 8, 2008

Vital Signs: Measuring Innovation - BCG's Innovation 2008 Report

Apple, Google and Toyota are once again named the 3 most innovative global companies by BCG's Innovation 2008 Report.

To make it to the list, the following criteria were used in the questionnaire to about 3,000 global executives:
* The company employs innovative operational processes that give it an advantage
* The company's business models for revenue streams are new and differentiated
* The company has created unique customer experiences that create loyalty
* The company has developed breakthrough products
* The company has developed breakthrough services

The report highlights five common characteristics that distinguish the best innovation leaders:
* The ability to tolerate ambiguity
* The ability to assess and be comfortable with risk
* The ability to balance passion and objectivity
* The ability to change
* The ability to command respect, even from those who are skeptical

Specific to the Vital Signs theme on measurement, in a companion report on innovation measurement, Measuring Innovation: Squandered Opportunities, the following statistics were presented:
* Only 35% of executives are satisfied with their company's current innovation-measurement practices
* Only 43% of companies track innovation as rigorously as they track their core business operations, even three out of four executives believe their company should do so
* Only 22% of companies consistently tie employee incentives to innovation metrics. 36% of companies never tie them together

The most popular metrics for gauging the success of innovation efforts are customer satisfaction (54 percent of companies said they use it) and the percentage of sales from new offerings (47 percent).

What's really surprising is the low level of implementation of innovation measurement practices. The report provides a good starting point with innovation-to-cash metrics, including measures which cover Startup Costs, Speed (time to market), Scale (time to volume), and Support Costs.

Tuesday, April 22, 2008

Vital Signs: Brand Value - Top 100 Most Powerful Brands (2008)

Does being innovative result in "brand value" and therefore shareholder value? There's new data to suggest that the correlation exists.

Millward Brown Optimor has released its third annual Brandz Top 100 Most Powerful Brands Ranking

The Top 10 List (in contrast to BusinessWeek's 2008 ranking of World's Most Innovative) is as follows:
  1. Google (No.2)
  2. GE (No.4)
  3. Microsoft (No. 5)
  4. Coca-Cola
  5. China Mobile
  6. IBM (No.12)
  7. Apple (No.1)
  8. McDonald's (No.30)
  9. Nokia (No.10)
  10. Marlboro
Of note is that Coca-Cola and China Mobile did not make the Most Innovative ranking but they're in the top 5 global brand value ranking. In the case of stalwart Coca-Cola, the surveys seem to indicate that the brand is strong but the company is not an innovator. It would appear , however, that with the newcomer China Mobile, brand value does not necessarily rely on being innovative (it didn't make BusinessWeek's regional list) when you can tap into the world's largest growth potential!

As a contrast to BCG's approach to surveying executives for the World's Most Innovative and looking at historic shareholder value growth, Millward Brown Optimor quantifies and projects expectations of brand value using quantitative measures and consumer surveys:

"The data for BrandZ is collected by interviewing consumers about brands from categories in which they shop on a regular basis. Respondents evaluate those brands competitively: they are asked to think about all the brands that they know within a category. The interviews deliver valuable insights because respondents who know a category are better suited to tell us what brand attributes matter to them most. These attributes are key measures of brand strength. BrandZ has interviewed over 1 million consumers who cumulatively compare 50,000 brands."

"Brand value is the financial value of a brand defined as the sum of all earnings that a brand is expected to generate. For the purpose of the BrandZ Ranking, Millward Brown Optimor values brands in three steps. First, we establish a company’s intangible earnings and allocate them to individual brands and countries of operation, based on publicly available financial data from Bloomberg, Datamonitor ( and our own research. Secondly, we determine the portion of intangible earnings attributable to brand alone, as opposed to other factors such as price. This metric, known as Brand Contribution, reflects the share of earnings from a product or service’s most loyal consumers or users. For this second step, we use research-based loyalty data from the BrandZ database. Finally, we project the brand value forward based on market valuations, the brand’s risk profile, and its growth potential."

Finally, the 2008 BrandZ press release provides the following takeaways:
  1. Established vs Emerging Asia. Chinese brands continue to get stronger.
  2. BRIC's (Brazil, Russia, India, China) continue to help drive international growth.
  3. The Technology sector boom. Technology led this year's brand value growth of $187.5bn. This is more than half of the Top 100’s total increase.
The net of this new data and methodology (see details in 2008 Report) is a calculation is that has 3 key factors:

Brand Value = Intangible Earnings x Brand Contribution x Brand Multiple

With globalization and the rapid growth of China, it will be fascinating to see how these rankings evolve over time! Comparing the two reports mentioned in this post, there does appear to be a significant connection between innovation and brand value. In future posts I intend to dissect the equation, further unpacking how the BrandZ report makes key assumptions in predicting the future. Let's not forget, however, Michael Raynor's recent strategic research and bestseller, The Strategy Paradox, that concluded you can't predict the future!

Sunday, April 20, 2008

Vital Signs: BusinessWeek's 2008 Most Innovative Companies

BusinessWeek recently released its annual "Most Innovative Companies" issue and its list of The World's 50 Most Innovative Companies Interactive Scoreboard

Apple (AAPL) again leads our list. [Link to Apple brief here]But the added metrics and more global nature of our respondents produced new names. Tata Group and Nintendo both landed in the top 10 for the first time. And dark horses like struggling General Motors (GM) received a surprising number of votes, thanks to concept cars like the electric Volt and a renewed focus on design.
BW explains its methodology:

To determine our 2008 list of the 50 most innovative companies, the Boston Consulting Group once again asked executives to vote for the most pioneering companies in the last year. In a climate when innovation will be scrutinized more than ever, we added three financial measures. For 2008, votes cast in the BusinessWeek-BCG survey got an 80% weighting, while three-year revenue and margin growth each got 5% and stock returns were weighted 10%.

BCG sent the 17-question survey electronically in November to the 2,500 largest global corporations by market value. More than 2,950 executives responded, our largest sample ever. BCG also sent it to readers in senior management, including members of the BusinessWeek Market Advisory Board. Participation was voluntary and anonymous, and self-votes were eliminated. To compare financials of private companies, we used metrics equal to industry performance.
The survey itself isn't published but of particular interest in the scoreboard are the categories used to assess innovativeness in addition to the 3 key quantitive measures of revenue growth, margin growth and stock returns over the 2004-2007 period.

Survey Categories:
  1. Products
  2. Customer Experience
  3. Processes
  4. Business Models
Notably, Google was number 2 with a focus on online office software and upcoming video ads.

The issue provides some other interesting insights including a description of ING's approach:
The online banking arm of this Dutch financial giant, ING Direct, was a pioneer in consumer finance, with high-interest savings and no regular branches. In its U.S. ING Direct business, executives are frequently moved from one function to another to promote collaboration; the unit's internal "Innovation Pipeline" site offers a place for employees to swap and vet creative ideas.
The issue also notes that Starbucks has implemented its as I have blogged previously here.

Finally, it was interesting to see Facebook make it on the list for the first time!

In future posts, I'll profile the most innovative companies in more detail.

Saturday, April 19, 2008

Vital Signs: BCG's Measuring Innovation 2007 Survey

Boston Consulting Group's Innovation practice has some interesting insights to measuring innovativeness in their "Measuring Innovation 2007: A BCG Senior Management Survey":

The paper's summary is a companion to the 2007 BCG-BusinessWeek innovation survey and BCG's Innovation 2007 Report:
For most companies, innovation is the key to driving growth, shareholder value, and competitive advantage in today's global economy. But even at the best companies, up to a third of all innovation initiatives are draining valuable resources.

According to the most recent BCG-BusinessWeek innovation survey only 46 percent of senior management are satisfied with their return on innovation spending while 63 percent of chief financial officers are still unhappy with their innovation results. Innovation remains a top priority for 66 percent of respondents, and 67 percent are planning to increase their investment in innovation.

The problem these companies face isn't a lack of ideas—most of them have more than enough. It's that companies don't have a disciplined process for turning those ideas into cash. An effective innovation-to-cash process (ITC) is the foundation of successful innovation, which we define as profitable innovation.

For those seeking measures for their innovations, BCG learned that the most common measures used by organization to assess their innovativeness were:
  • Total funds invest in growth projects
  • Projected versus actual performance
  • Average development time per project
  • Revenue realized from offerings launched in the past three years
  • Allocation of investments across projects
  • Number of projects that meet planned targets
  • Cannibalization of existing product sales by new offerings
  • Percentage of ideas funded
  • Number of ideas killed or table at each milestone
In future posts, I plan to dissect the report and its recommendations in more detail.

Monday, March 31, 2008

Vital Signs: Cisco's 1100 New Business Ideas (I-Prize)

Here's another example of Open Innovation, this time courtesy of Cisco. Cisco has been running their I-Prize competition to generate the next new crop of business ideas (Q&A here):

Q: What is the Cisco I-Prize?
A: Cisco knows that the global community is an amazing resource of creativity and innovation. Therefore, Cisco is looking beyond its own resources and turning to the Human Network to identify its next major business opportunity. Before you submit your idea, consider what problems it addresses, how it's new and different, and who comprises your target market.

Cisco will select up to 100 semifinalist teams that will work with Cisco experts using state-of-the-art collaboration tools to build a business plan and presentation. Next, up to 10 finalist teams will present to a judging panel for the ultimate prize: the opportunity to start a new business unit with access to the resources that Cisco has to offer.

Raising the stakes on efforts of Dell and Starbucks I described previously, Cisco has put a value on the potential new businesses by providing a financial reward for the best business ideas:

What's At Stake

The winning team may have the opportunity to be hired by Cisco to found a new business unit and share a $250,000 signing bonus. Cisco may invest approximately $10 million over three years to staff, develop, and go to market with a new business based on your idea.

During the project, Cisco reps wrote:
Now two and a half months later we know that more than 1600 people have entered from almost 90 countries. There are many, many high-quality ideas worth considering as semifinalists. And the level of community discussion and interaction has been unbelievably high. Global collaboration is really working. Feedback from everyone has been extremely positive.

More recently, the voting process was discussed:
In I-Prize, there is a voting mechanism that lets participants raise (or lower) the overall score for an idea. This is not how we choose the best ideas. If so, why did we bother to put in the voting system? Let me explain: we have a set of internal questions that we asked for every idea: is it a big market, can Cisco get a good share, how close to our existing businesses, can we ensure enduring differentiation, etc. The answers to these questions were used to determine the overall score for an idea.

We then went back an looked at the user-voting and we also looked at which ideas had attracted the most feedback and discussion. We used this to check whether there were ideas that had attracted a higher community vote (but that maybe had been scored lower by our own internal evaluation). We also considered ideas that we had scored lower but which had attracted a lot of responses and discussions. We then chose some ideas in these categories to add to our list of semi-finalists.

The reason for doing this is that we wanted to combine expert opinion with the wisdom of crowds (and we wanted to see if there was any strong disagreement between the experts and the community!). If your idea got a low community vote--rest assured--we evaluated every idea on its merits without considering the vote. If you attracted strong interest from the community, we listened to that as well.

It's very interesting to see some of the stats posted by Cisco:

Team members from the Semi-finalists are a very diverse group:
- Competitors from 13 Countries on 5 Continents
- 20% of the teams are multi-country
- Teams ranging in size from 1 to 9 people
- Competitors ages were evenly distributed between people in their 20s, 30s and 40s or higher

For those of you curious about the ideas that were selected:

- Ideas fell into a broad range of categories: Comms Infrastructure, Connected Home, E-Learning, Mobility, Security, Services, Emerging Countries, Unified Communications, Video, Virtualization and Web 2.0
- When an idea was submitted had little bearing. Ideas were evenly distributed across the competition time frame
- Some ideas had lots of information, some had relatively little (at least publicly viewable) but some contributors who appeared to publish little did supply us with private information to help guide our selection
- Comments, votes and private information made the most difference when we were evaluating very similar ideas
- There were some great business ideas, but not so great for Cisco. We encourage those that believe passionately in their idea to continue working on them
- There were a few very good ideas that we have already been working on

As of writing this, the contest was still up and running and in the semi-finals phase:
The results are in: After reading, discussing and scoring over 1100 new business ideas, we have selected 32 teams as Cisco I-Prize semi-finalists.

Congratulations to the teams that have been selected. The Cisco team is very excited to be working with you on your semi-final presentations.

Interesting to see that they chose 32 teams out of a maximum target of 100. One can only assume that the only 32 ideas qualified.

Hope to read about an update soon!

P.S. Thanks to Paul Tran of BrightIdea for this heads up!

Sunday, March 30, 2008

Vital Signs: Dell's 8,970 ideas and Starbucks' Top 20 Ideas In Action

As it relates to measuring innovativeness and creating growth strategies, measures of corporate performance, or vital signs as I refer to them in this blog, should include a sense of how good the organization is at generating ideas and converting them to products that generate cash flow.

I have previously written about Idea Capital and the value of ideas.

This posting is about how Dell and Starbucks are using's Ideas application to generate new ideas for themselves to make them more innovative and competitive. describes it like this:

Who is it for?

Innovation is vital to the growth and success of any organization—large or small. The more people you can engage, the stronger your feedback loop becomes.

There are lots of ways you might leverage Ideas internally. Create a community for “ Sales Advice and Winning Strategies” to capture the knowledge of your top sales reps. You could also create a company wide community with categories for each department so that your employees can submit ideas to Marketing, Product Development, or HR - regardless of where they sit within the organization.

Customers and Partners
Ideas can be extended to your customers and partners as well. Many companies are interested in using it to capture customer feedback, You could also use it to facilitate discussion between customers, deflecting questions to experts in the community while driving down support costs.

At Dell, as of March 30, 2008, they're Ideastorm website claims to have received 8,970 ideas which have been promoted 615,865 times and have been commented upon 69,514 times by other users.

Of particular interest is the user rankings table . Dell has exposed the list of contributors in its community, complete with a total points ranking, votes cast, and articles submitted. Currently, user dhart has 49,774 points, 109 votes cast, and 7 articles submitted. This could mean that dhart has the most quality ideas to help Dell become more successful.

Over at Starbucks, they launched a similar idea site on March 19, 2008, also on the platform. MyStarbucksIdea begins with the following invitation to participate:

You know better than anyone else what you want from Starbucks. So tell us. What’s your Starbucks Idea? Revolutionary or simple—we want to hear it. Share your ideas, tell us what you think of other people’s ideas and join the discussion. We’re here, and we’re ready to make ideas happen. Let’s get started.
Starbucks also delivers a blog called Ideas in Action to share how the ideas are being evaluated and implemented. The first entry by CEO

At the core of the Starbucks Experience is human connection. Every week, nearly 50 million customers are connecting with over 170,000 partners (employees) in Starbucks stores around the world—creating an unparalleled sense of community.

This unique Starbucks community has inspired many people to suggest that Starbucks participate in the phenomenon of online communities. Well, now we’re ready to begin.

Welcome to This is your invitation to help us transform the future of Starbucks with your ideas—and build upon our history of co-creating the Starbucks Experience together.

And just like in our stores, our curious and passionate Starbucks partners are here. Engaging in daily conversation—bringing the warm, human connection of a great Starbucks experience to this online community.

So, pull up a comfortable chair and participate in My Starbucks Idea. We’re here, we’re engaged, and we’re taking it seriously.

Two days later, a Starbucks spokesman posted in the Ideas in Action blog:

We are completely thrilled at the number of ideas (thousands!). We are stunned by the level of conversation (half of the top 20 ideas have 50 or more comments each -- 50!). We are stoked by the amount of participation (tens of thousands of votes).

What's particularly interesting about both of these examples is that the companies have gone outside their own walls, beyond merely engaging their own employee base (although they should obviously do that!) to engaging their customers in creating ideas to help them be more successful. They're gutsy moves, opening themselves up to potential public criticism (e.g. "DO something about the click noise..." idea)

Starbucks' fine print regarding its ownership of your ideas is here:

The submission of your Idea to Starbucks is entirely voluntary, non-confidential, gratuitous, and non-committal. You understand that Starbucks may be working on the same or a similar Idea, that it may already know of such Idea from other sources, that it may simply wish to develop this (or a similar Idea) on its own or it may have taken/will take some other action. In return for Starbucks' review and consideration of your Idea, you acknowledge that you have read, understand and agree to the terms enumerated below, and further agree that these terms shall apply to any additional material previously or later submitted, until such time as Starbucks otherwise agrees in writing

The challenge in these implementations is that the companies do not place bounties on solutions (as in the case of Innocentive or the $100M innovation fund for Apple iPhone native applications mentioned in this blog) but view it more as a conversation, with no promise of financial reward to their external contributors. It will be interesting to see if these attempts at incorporating the "voice of the customer" into the innovation cycle will pay off for Dell and Starbucks. It's not clear whether Finance is at the table helping to place a value on these ideas but if they're not they should be. My view is that the bounty-approach will ultimately generate more interest.

Vital Signs: Apple's 1301 web apps and over 100,000 SDK downloads

How strong are Apple's (AAPL) corporate vital signs? Based on the two metrics in this headline their getting stronger!

As I've mentioned here before, I've expanded my definition of corporate vital signs beyond traditional lagging financial measures to include leading indicators of competitiveness and innovation. As investors appreciate when they estimate growth of future cash flows, there are no financial measures on balance sheets and income statements to reflect a company's reach and access to talent beyond its four walls. Traditional financial measures can't reflect the value of having a global developer community building software for your hardware device. A new set of corporate vital signs is required.

Let's take a look at Apple's newest innovation, the Apple iPhone and iPod touch. While much more than merely interesting, their success could have been limited by the ability of Apple's limited in-house resources to develop new and exciting applications. But with the recent launch of the new SDK, Apple has poured the foundation for an entirely new innovation platform. No longer does Apple need to rely on in-house developers to create native applications.

Without the SDK, the developer community can already make web apps available to run on the devices. These applications are being displayed by Apple at As of March 30, 2008 there were 1301 web apps listed in the Apple webapps website.

This is interesting but not where the real value of Apple's innovation lies. What's more interesting is the upcoming June '08 launch of Apple's store for native iPhone applications. Development of these native applications is made simpler through the iPhone Software Development Kit (SDK) and Apple claims 100,000 downloads of the SDK in the first 4 days since its launch:

“Developer reaction to the iPhone SDK has been incredible with more than 100,000 downloads in the first four days,” said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. “Also, over one million people have watched the launch video on, further demonstrating the incredible interest developers have in creating applications for the iPhone.”

Apple also previewed the new App Store, a breakthrough way for developers to wirelessly deliver their applications to every iPhone and iPod touch user. Developers set the price for their applications—including free—and retain 70 percent of all sales revenues.

Leading developers such as AOL, Electronic Arts, Epocrates, and Sega have already demonstrated amazing applications using the SDK, and developer response continues to be phenomenal with more developers embracing the platform.

As Apple takes in 30 percent of all applications sales, a new leading measure of Apple's cash flow will certainly be the "number of 3rd party applications" and "the price of the application"

The fun doesn't stop there. Apple pretty much guaranteed strong interest in the platform by bringing the famed KPCB venture capitalists to the table. At the launch of the SDK, KPCB announced that they have created a $100 million iFund to invest in companies that are able to bring new applications to the platform:
"A revolutionary new platform is a rare and prized opportunity for entrepreneurs, and that's exactly what Apple has created with iPhone and iPod touch," said John Doerr, Partner at Kleiner Perkins Caufield & Byers. "We think several significant new companies will emerge as this new platform evolves, and the iFund will empower them to realize their full potential."

And Steve Jobs proudly declared:
"Developers are already bursting with ideas for the iPhone and iPod touch, and now they have the chance to turn those ideas into great companies with the help of world-class venture capitalists," said Steve Jobs, Apple's CEO. "We can't wait to start working with Kleiner Perkins and the companies they fund through this new initiative."
Finally, not content to remain a consumer device, Apple announced that they are building Enterprise-grade connectivity into the next generation of the device to be available in June '08.

Just imagine this...the iPhone is now on the verge of a development boom. This development, spurred on by a $100 million venture fund, will deliver a whole new suite of mobile applications for the consumer as well as the enterprise. By opening up the development platform, Apple has significantly strengthened its competitive position and set itself in motion to become the leading provider of handheld entertainment and productivity devices for some time to come.

P.S. Apple is most certainly borrowing a page from and its platform. has been a pioneer in allowing developers to build and sell applications that will run on's platform. More on that in another post.

Saturday, January 26, 2008

Vital Signs: Wal-Mart CEO Describes the Company of the Future ... and a transformation into an energy provider for its customers

Wal-Mart CEO and President Lee Scott describes Wal-Mart's vision in a January 23, 2008 presentation to its Wal-Mart U.S. Year Beginning Meeting. (full video here)

This was not a speech merely about the financial performance measures of Wal-Mart U.S. but more a rallying call for Wal-Mart's leadership in solving the world's most difficult challenges through a vision for the future that will fulfill its mission to "save people money so they can live better"

I looked for the vital signs of Wal-Mart in the speech and was not disappointed. Scott began with the basic Financial Vital Signs:
Lee recounted the following two financial vital signs for Wal-Mart
* 2.4 % comparable stores increase as competitors were having decreases
* 18.2% increase in net sales

What really surprised me was that he then went on to focus on the major issues of the world today and how Wal-Mart will be a leading problem-solver in Health Care, Energy Efficiency, and Supply Chain Management.

More Affordable Health Care Through Efficiency
Lee described Wal-Mart's transformation of its technology leadership to providing value added services for health care:
We think we can even do more with prescription costs. This year we will be contracting with select employers in the U.S. to help them manage how they process and pay prescription claims. Our approach will be based on taking out unnecessary costs while providing high quality health care products and services. With this effort, we believe we can save employers more than $100
million this year alone.

Vital Signs:
* 93%/82%: number of Wal-Mart associates with health insurance/ Americans insured
$100 million: Wal-Mart's target to save employers
* 2010: Year by which Wal-Mart will provide e-Health records
* 8 million: number of electronic prescriptions which Wal-Mart will fill in the U.S. in 2008 (400% increase over prior year)

A More Energy Efficient Future

Scott explained the energy challenge in terms of the impact on Wal-Mart's customers:
"Every day in our stores, we see the impact of $100 a barrel oil and high natural gas and electricity prices. We see our customers having to choose between filling up their gas tanks or buying food and medicine and clothes. In America, out of pocket energy costs for working families have doubled over the past decade. These families now spend an estimated 17% of their monthly income on energy. Somebody has to do something. And your Wal-Mart will."

“What if we extended our mission of saving people money so they can live better -- to saving people money on energy?” Scott asked. “We believe we can do this. Wal-Mart can help our customers use less energy and spend less on energy. This will also help every country where we operate reduce their dependence on foreign oil.”

He then outlined a vision for how Wal-Mart innovate along with the auto manufacturers to actually providing energy to its customers through its vast network of

"What if we looked at whether Wal-Mart could provide eco- friendly energy to our customers? What could we do in the U.S. -- where per capita energy use is among the highest in the world?"

"Imagine your customers pulling into your parking lot, and seeing wind turbines and solar panels, and being able to charge their cars while they shop. I think that would make them feel good about shopping at your stores. It would also make them feel good if they could save money in the process. What if we fed the power generated by those wind turbines and solar powers back into the electrical grid? Just imagine the impact of our customers being able to buy eco-friendly energy at the unbeatable Wal-Mart price."

Energy Efficiency Vital Signs:
* 30%: energy efficiency improvement of flat panel TV's sold
* 3 million: number of homes that can be powered with Wal-Mart's projected energy savings from working with suppliers "to make the most energy intensive products in our stores, anywhere in the world, 25% more energy efficient within three years...or the equivalent of 10 million barrels of oil."

Supply Chain of the Future
On the topic of ensuring that products are made safely, Scott shared a vision for an industry-wide transformation:
"In the next three years, we would like to build a very different system. We believe that there should be one framework of social and environmental standards for all major global retailers. And there should be one third party auditing system for everyone. This will ensure improvement can occur across the board on a level playing field."

We first read about The Wal-Mart Effect and its relentless pursuit of low prices. Wal-Mart's business practices have been often criticized by organizations such as Wal-Mart Watch, most recently in "Wal-Mart Opens 4 Efficient Stores - Only 6,796 Energy Hogs To Go". However you land on your view of Wal-Mart, no one can argue that the inspiring message Lee Scott delivered was about a company that cares for the world and the U.S. people, and a company that will leverage its leadership in technology and its reach to benefit its customers, its employees, and its shareholders.

Wednesday, January 23, 2008

Vital Sign: Toyota poised to be No.1

CNNMoney reports that GM is no longer No.1. The numbers have come in at 9.37 million vehicles for each of GM and Toyota.

Over at the BusinessWeek Auto Beat Blog, "Who's No.1? Who cares." the focus of the story is not on whether Toyota is now the world's largest auto manufacturer but how Toyota has actually resisted becoming No.1 by reducing its incentives.

While the crown is interesting for the fact that GM held it for 76 years, I think we'd all agree that absolute volume is not the auto makers' "vital sign" here but rather profitability. I expect the numbers will be telling on that front and Toyota will truly be No.1