Archive for 2005

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Labor as a Variable Cost

Friday, December 30th, 2005

by Dean Whittaker

In our global knowledge-based economy, manufacturing labor has become a variable expense, with innovation being the only sustainable competitive advantage. Knowledge workers, however, should comprise a fixed cost, since they are indispensable to the organization’s success.

As labor has become a commodity on the world market, a race to the bottom of the pay scale has ensued. But with expertise and knowledge becoming a differentiating factor, we have seen power shift from the employer to the talented employee. Operating a knowledge-based business becomes more like running a volunteer organization or a cooperative, with expert employees becoming associates or even partners in the enterprise.

Automation may soon remove a large portion of the labor component in the service sector, just as it has done for manufacturing. Off-shoring and out-sourcing are beginning to affect service-oriented business as more of the back-office functions are seen as non-core business activities that can be done elsewhere by Business Processing Outsource ( BPO ) firms, particularly in India and China. The theory is that by out-sourcing the non-core business activity, more corporate time will be available to provide higher value-added services to the client by knowledge workers.

There are other benefits to out-sourcing non-core activities besides significantly reduced labor cost: access to large-scale talent pools with a wider variety of resources, reduced response time to client needs due to time-zone differentials, and a new, large-picture focus in the headquarters geared to design, build and run the processes.

What the future holds for many US service companies may be a global enterprise with components of work being performed where the talent pool, language, and communication technology intersect.

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Innovating the library

Friday, December 30th, 2005

by Tammy Hart

In a sense the Internet is the largest public library in the world – so what would attract people to the local library? Are you getting your tax money’s worth for the services and resources your library has to offer? Value-added services are all the rage right now, but what has the librarian done to help you lately? What would motivate the library staff to go above and beyond or to even care whether anyone actually utilizes the facility?

Llewellyn Rockwell, Jr. suggests that public libraries be sold to the highest bidder and be turned into privately owned entities. This got me thinking about what a privately owned library could potentially be in my perfect world. Llewellyn H. Rockwell Jr. is president of the Ludwig von Mises Institute in Auburn, Alabama. He also edits a daily news site, LewRockwell.com

If I was really thinking out of the box with an unlimited amount of money and time to re-design my own library, I would include more staff than just the librarian. I would hire a very diverse group of people with all different educational degrees and employment backgrounds such as teachers, accountants, grant writers, journalists, editors, and managers, to name a few.

I would extend the hours of operation to accommodate schedules of working people. I would include a coffee shop with plush furniture and round tables for networking. I would stay on top of the technology game–not only providing internet services, but adding several access options, including wireless, cable, dial up, and satellite. I would make it possible for patrons to use these services by signing in under their own accounts.

The federal government hires privately owned, one-stop career centers that are designed to be the initial point for delivery for all workforce investment programs. I would include this in my library, or check into the possibility of supporting some of their programs. I would offer career assessment programs, or I might speak with the local college to see if we could both benefit from a shared career counselor, who could also recruit new students.

I would have private rooms for hosting seminars. I would bring in temporary employment agencies to promote local job openings. I would offer tests to inventory work skills and use that information to promote my community’s skill sets to companies that might be persuaded to move to my community.

I would have products for sale, including floppy disks, CD’s, DVD ‘s, laptop and PC hardware, briefcases, planners, lined paper, spiral notebooks, resume paper, and writing utensils, and many other items that could be found at an office supply outlet.

To summarize I’m talking about a library, book store, coffee shop, conference center, career assessment center, training center, recruitment center, office supply center, a place for networking, and a place where people can go to relax…all rolled into one entity. The idea of having one centralized location for all of these services may not be practical, but its food for thought and I truly believe that we need to put more thought into making practical use of the public libraries in our communities.

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HappyNews.com

Friday, December 30th, 2005

by Joel Burgess

HappyNews.com

As the Christmas season wraps up and the New Year begins, do you ever get the feeling that any resemblance of good cheer that existed quickly gives way to long, angry, customer-service lines? (Those same lines that trampled people at Wal-Mart on Black Friday?)

I am always thankful for the Christmas season, and yes, I do receive many more gifts than anyone deserves, but that is not why I am thankful. I am thankful because Christmas is about happy news!

Every morning, I make an attempt to read, or at least glance over, the Financial Times , New York Times and the Grand Rapids Press . I also make an effort to skim through BBC.com, CNN.com, and foxnews.com.

Talk about bummer news galore. Let’s take today, for example. Front Page headlines verbatim: “Beirut Car Kills Lawmaker, Critic of Syria – String of Assassinations” (NY Times), “U.P. Nursing Home Fire Kills Two” (GR Press), “U.S. Gang Leader Executed”"( BBC.com), “Warden: Williams ‘Frustrated’ Execution Didn’t Go Quickly” (CNN.com). I could go on, but I think you get the point. On the other hand, you have to dig much deeper to find happy news.

Well, now there is a website dedicated to Happy News – www.happynews.com .

HappyNews is the brainchild of Byron Reese, chief executive of Austin, Texas-based PageWise Inc., which publishes several how-to and advice Web sites. He decided the world needed a refuge from all the unpleasantness served up by newspapers and television news shows, so he launched HappyNews in July.

HappyNews uses articles from The Associated Press and other news outlets, as well as press releases that come from 150 citizen journalists, who must follow standards for fairness, accuracy, spelling and grammar, and provide sources so HappyNews can fact-check their stories.

So who reads HappyNews?

Reese states that there is no clear geographic pattern – it doesn’t appear that one part of the country likes happy news more than others do – but about 60 percent of the readers are women

…and perhaps, myself.

Sources:

www.cnn.com

www.happynews.com

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Wireless or Die

Friday, December 30th, 2005

by Pete Julius

Can you remember the days when cell phones did not exist? Do you remember when laptops did not exist? Can you remember when PDA’s did not exist? A more important question…do you remember how difficult it was to communicate with people without all of these technological devices? Parents now have the comfort of being able to call and reach their children to find out where they are. Of course, the challenge is then to get them to answer the phone. Business people now have the luxury of making phone calls from the road and checking email while sitting in a boring conference session. Of course, now everyone is complaining about not being able to get away from work on vacation because of how easy it is to communicate with each other. All of these technologies have their desired attributes and frustrating downsides, but they have no doubt made life easier.

The rapid advancements in cell phones, laptops, PDA’s, and other similar devices have allowed people to communicate via wireless applications. Wireless applications allow people who are sitting in a cybernet café to have access to the Internet while sitting at a table and sipping a latte. The ability to be able to connect wirelessly is becoming an increasingly desired and needed infrastructure for communities to make available. It helps communities retain and recruit talented and creative people. The same can also be said of businesses. Wireless connections, as well as fiber optic and other wired connections, allow people and businesses to connect with anyone, anywhere and at any time. Globalization has fueled the growth of this technology and it has become vitally important to the life and success of any organization. Wireless infrastructures also allow people to access educational opportunities that may not exist within their own communities. For instance, wireless infrastructures and other forms of telecommunication infrastructures allow people to get college degrees at the undergraduate and graduate level through online institutions, such as the University of Phoenix . The benefits of wireless infrastructure are plentiful, but the existence of wireless in a lot of communities is lagging behind. Most major cities and a fair percentage of rural communities have access, but all of them should. Here is a quick list of tactics that will help communities establish a wireless infrastructure:

Needs: Identify who needs (people, businesses, government, schools, etc.) broadband service and determine the revenue that will be generated from this source.

Support: You must have support from people, private organizations and public entities.

Assistance: Make sure to inquire about any loans, grants or other forms of assistance available from state and local utilities.

Obstacles: Get rid of any laws, regulations or restrictions that prohibit the creation of a broadband internet access system.

Partnerships (stakeholders): Develop partnerships to offset costs. Work together at the regional, county and state levels to help plan, develop and pay for the wireless and broadband networks. Partnerships may also include private and public entities.

Infrastructure: Based upon needs, determine what type of wireless broadband is preferred.

Cost: Figure out how much, who’s going to pay for it, and where the money will come from.

Participation: Identify who will be engaged in the planning, development, implementation and maintenance of the new wireless infrastructure.

Plan: Create a plan for developing the broadband network that at least includes evaluating type of broadband connection, security-related issues for users, desired location of network, site surveys, type of equipment, funding, etc.

If this is not enough to get you started, then check out the following list of helpful links.

Links

A Nation Online: Entering the Broadband Age: http://www.ntia.doc.gov/reports/anol/NationOnlineBroadband04.htm

Broadband Demand and Business Productivity:http://www.technology.gov/OTPolicy/

Six Wireless Communities’ Best Practices Award Winners: http://www.govtech.net/magazine/channel_story.php/96946

Wireless Internet Institute: http://www.w2i.org/

E-NC Authority: www.e-nc.org

2005 Southeast Wireless Symposium: http://www.e-nc.org/2005wirelessforumpresentations.asp

Municipal Wireless: http://muniwireless.com

Rural Broadband Coalition: http://www.ruralbroadbandcoalition.net/

Virginia ‘s Center for Innovative Technologies: http://www.cit.org/broadband-05.asp

CTIA: The Wireless Association: http://www.ctia.org/

Wi-Fi Net News: http://www.wifinetnews.com/

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Keep it Local – Incubate!

Friday, December 30th, 2005

by Megan Jewell

Attracting new business is a crucial part of filling the economic pie. I don’t think anyone would disagree with that. Unfortunately, with so much of the economic development focus on businesses not yet in the area, the potential new business right under our noses tends to go unnoticed. In this day and age, it is vitally important to focus not only on outside businesses that might relocate, but on local businesses looking to make a start. This is especially important to those communities that have experienced a “brain drain” from young, educated people leaving the community to go elsewhere. Some of this could be prevented by simply having the resources and tools in place to keep young entrepreneurs local.

A recent Business Week article shows startup companies the benefits of starting out in a “business incubator.” Like the machines we knew in kindergarten that kept chicks warm as they emerged from their shells and grew feathers, business incubators help new companies take wing with cost-saving measures and smart advice. Informal incubation may take many forms, from affordable office space with shared resources to financial and start-up experts willing to work with newcomers. Banks can incubate. Real estate professionals can specialize in helping start-ups. Chambers of commerce can provide insider advice on the community.

Some communities have even developed formal incubation groups that work together to assist newcomers to business. Incubators can be wonderful tools for entrepreneurs who need a little help getting their businesses up to speed. Incubation can offer solutions to funding, supply, and resource needs. Incubators may offer entrepreneurs a below-market rent rate. They could also offer a range of access to resources such as free marketing and accounting advice from local professionals, or even fax machines and copiers that are shared with other tenants. Some experts or outside consultants may be willing to work at a reduced rate.

Most formal business incubators are strict in their choice of who they allow into the group or facility. It is essential for the entrepreneur to have a well-structured and thought-out business plan. Usually they meet with the owner or board of the incubator and are asked difficult questions about the business’s growth strategy. Members of the incubator are helpful in setting goals for the business and deciding what credentials, once met, will mean the business owner “graduates” from the incubator to strike out on his or her own.

To design an incubator, imagine you’re an entrepreneur considering a business incubator, and think about your needs. You’ll want to know about the incubator’s assistance program, cost of available resources, graduation requirements, flexibility of rules, long-term lease arrangements, and fees charged by outside consultants. You may be concerned about being forced to “graduate” before you feel prepared, leaving your vulnerable business at risk. You will want to take a look at the companies that have recently graduated…are they where you want your company to be?

These are all things an entrepreneur will be looking for when searching for an incubator. They may want to know if you are a mixed-use incubator or a sector-focused incubator. Does your incubator have this information readily available? Do you have a list of recent graduates who might speak about their experience? What resources do you have available to startup companies?

If an incubator sounds right for your community, the National Business Incubation Association website has access to numerous resources ( www.nbia.org/resource_center ), with a list of resources for each state. Some of the information is for members only, but you can learn a lot without membership. Entrepreneurs can locate member incubators by state, so it may benefit you to become a member.

Having plans and tools in place to keep local talent from going elsewhere will help to ensure that entrepreneurs become invested in the future of the community. They are much more likely to stay in the area, connected to the people and roots established while they began their business. Soon, they may be helping to hatch some fledgling businesses themselves.

For the full article please go to http://www.businessweek.com/smallbiz/index.html , “Hatching For Success,” by Michael Patterson.

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The Search and When the Future Catches You

Wednesday, November 30th, 2005

by Dean Whittaker

“500 Channels and Nothing On” by Bruce Springsteen describes the reason I read two books this month. Other than Jon Stewart’s Daily Show, my TIVO didn’t record a bit or byte. I would like to share my “take away” from each of these books and encourage you to pick them up on your next long flight or when you need to re-create what you are doing.

The Search

Have you ever dreamed of the “perfect search”? The folks at Google have. In his book, The Search, John Battelle tells the story of how Google and its rivals are changing our culture. The book describes the history of information retrieval on the internet.

He describes Google’s motto – “Don’t be Evil”–and their modest mission statement: “organize the world’s information and make it universally accessible and useful” http://www.google.com/corporate/ . John Battelle also notes the ethical dilemma created for Google when mainland China required Google to filter out websites unpleasant to mainland China ‘s government from its search results there.

He brings out the dramatic impact that Google is having on the nature of advertising as it shifts from a content-driven model to a very targeted relevance-advertising model. Content advertising is putting an ad in a magazine hoping the intended audience will see the ad while reading the publication’s contents. An example of relevance advertising would be having an ad relevant to your search appear next to your Google search results.

By monitoring the click stream of its users, Google knows what people want. Needless to say, this is very valuable information and perhaps explains why Google’s stock price recently exceeded $400 per share after opening at $85 following the recent Initial Public Offering.

The book is an easy read and I think you will find many useful insights in it.

When the Future Catches You

Another book I read this month was When the Future Catches You by Juan Enriquez. In it Dr. Enriquez discusses the impact technology is having on our society and some of the ethical issues the use of technology creates. He says, “The rules of an economy based on knowledge and networks are very different from those of a manufacturing-based economy.”

He talks about the bifurcation of our society based on what I would call “The Knows” and “The Know-nots.” The knowledge gap between the “knows” in the world and the “know-nots” is growing dramatically wider. Juan Enriquez offers a method to measure this knowledge gap using the number of patents produced in a country or community (This may be a little deceptive because ideas know no boundaries, as exemplified in the development of “open-source” software development efforts of networks of volunteers).

Juan explains that those locations that produce new knowledge will prosper and increase in importance. Education will become the key factor to being a participant in our knowledge-driven economy, and continuous innovation will be required to compete in the global marketplace. He then goes on to discuss the de-coding of the genome and the enormous impact this will have on our society. Medicine, for example, will become about prevention rather than treatment, using genetically-engineered plants whose produce provides gene therapy tailored to our genetic susceptibilities. The sheer volume of information flowing from the effort to understand what makes us who and what we are is creating a whole new industry – “bioinformatics.” In our cyclical world, I wonder if agriculture will become the factory of the future. Wouldn’t that be a hoot!

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Rank Your Ideal Prospects…Introducing the Predictive Model

Wednesday, November 30th, 2005

by Joel Burgess

Maybe you have already had this question:

I have a list of prospects. Is there a way to prioritize my prospects, allowing me to better focus my marketing efforts and more efficiently manage time, money, and other resources?

Whittaker Associates has your answer.

Whittaker is rolling out an innovative Targeted Company Predictive Model. The Targeted Company Predictive Model is a powerful tool that identifies and ranks the companies with the highest probability to relocate or expand into any particular geographic area.

So How does it work?

The first step in the process is to identify companies that have recently located to your area (in the last 3-5 years). Whittaker interviews these companies and based, in part, on the information obtained, we determine the factors that triggered those companies to relocate or expand to your area. Then by cross-referencing and establishing common denominators between the determining factors of your area’s new companies and companies that show the greatest promise to relocate or expand, a matrix of variables is formed. Our current matrix ranks high-growth companies based upon their correlation with 41 variables (19 industry factors and 22 company factors).

Each variable is assigned a numerical score, based on the direct causal effect it has on the likelihood of a company’s decision to relocate or expand. If a company exhibits the variable, a tic or mark is placed in the matrix under that variable for that particular company. The idea is to establish a Weighted Total. The weighted total is the sum of all the values of the 41 variables that a particular company exhibits. The higher the weighted total the greater the likelihood of a relocation or expansion.

An example output:

Weighted Total Company
865 Angus Palm
850 Cell Genesys, Inc.
805 Bridgestone/Firestone North American Tire, LLC

The Predictive Model accounts for the time sensitivity of the information provided, given the dynamic nature of today’s businesses. The Predictive Model can be updated to re-rank companies, reflecting any known changes that occur within the targeted companies or within industry trends.

In addition, the Predictive Model can be tailored to meet your specific needs in two ways: by adjusting the variables or the variable weights based on the importance they have in influencing a company to relocate or expand into your community.

As with all our lists, company records contain address, telephone, business description, sales and employment numbers, SIC codes, up to four contacts and titles, and when available, fax numbers, websites, recent articles, and company locations.

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Building a Structure at Home

Wednesday, November 30th, 2005

by Tammy Hart

Not long ago I found myself overwhelmed, with not enough time in a day to accomplish all the things that I needed to get done. As much as I ran around doing laundry and dishes, there was never an end to them. I realized something had to give and something had to change; I was running myself ragged and had nothing to show for all my hard work.

My transformation into a control freak had started years ago when my son was a toddler. As a single, working mother, I always seemed to be on the go. Without realizing it at the time, I was teaching my son very bad habits that would haunt me for years to come. Since I was always so busy, rather than taking the time out to make sure he followed through with what I asked him to do, I would just do it for him. Now he’s nine years old and up until a few months ago, I was still doing everything for him!

One stressful day I came to the realization that I don’t have control over my household – my kids do! I remember laughing about it to myself. That’s when I decided to do something about it for their sake – and for my own sanity.

This may not sound logical, but I figured out that sometimes you have give up some control before you can get control back in your life. I had done everything for myself for so long and I liked everything done “my” way. It was hard to let go, but I started by creating a list of rules, including things like daily chores and the consequences for not getting chores and/or school work done.

We dedicate one night per week for more thorough cleaning such as changing bedding, washing windows, dusting, and organizing drawers and cupboards, to list a few. I chose Thursday (Friday is garbage day so my son gets the chore of taking the garbage out to the road).

Looking back, I think I felt strapped to my home by household chores most of the time, so it’s a huge weight off my shoulders to have the freedom to do things without worrying about the load of things that need to get done at home.

My son used to beg me to watch him ride his quad; now I take my daughter on the quad and ride alongside of him with his dirt bike. I’ve noticed an improvement in his grades and his attitude in general. Since I let go of some control and freed up more of my time, I’ve even expanded my menu at home (instead of the weekly tater-tot casserole, chili and spaghetti specials): now I have a more diverse selection of things to make, so that also makes it easier to plan ahead and keep on schedule.

I try not to be discouraged about the fact that I wasted so much time being stressed out before figuring out what needed to change. I just appreciate the fact that things are going smoothly. I still color-coordinate my closet, and go a little crazy reorganizing things, but sometimes I just have to look the other direction when my son puts his clean shirts in the pants drawer. I’ve definitely learned to let go of the less important things, like which direction the towels get folded.

For the most part, my house is actually cleaner and I have much more free time to relax with my kids because I’m not wasting my time running around multi-tasking (which often translates to running around being busy and getting nothing done).

One last thing that I should mention: God bless my daycare-provider who keeps my toddler on a daily schedule. Now she goes to bed at the same time every night – which has been a pleasant change since her early days of colic and many sleepless nights!

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The People are the Future

Wednesday, November 30th, 2005

by Pete Julius

For the past several years, this country has witnessed many U.S.-based corporations laying off domestic employees in order to establish more cost-efficient operations in a foreign country. It does not matter where these operations are going because this trend will continue to occur in China, India and other developing countries around the world. What matters most is how to deal with the situation. Economists and politicians are spending too much time crying like little babies, pointing fingers and playing the blame game. We should be spending our time, energy and effort figuring out how to find jobs for those displaced workers affected by this inevitable and endless trend.

As a result of this trend, most communities are left with the task of finding jobs for undereducated, undertrained people in an innovative, knowledge-based economy. In addition to this unprecedented skills gap, the personal income gap is growing bigger and bigger by the day. This country is becoming one of haves and have-nots. Most communities have been affected by this trend in some fashion, with rural communities hurting the most. These communities host workers with inadequate skills and low levels of education, and they lack nearby educational and training programs. As a result, the old philosophies and principles of economic development need to change.

Most economic development organizations are still focused on and measured by the number of jobs generated and the number of new and expanded facility announcements per year. In today’s economy and in the future, this approach will not maximize their results. These philosophies and principles will not address the biggest challenges faced by many of the hardest-hit communities. Under such a system, an economic development organization appears to be successful for generating low-wage, low-skill jobs. In many instances, these jobs were developed for displaced workers and often times do not pay as much as their previous jobs. So what can communities do to provide better, higher-skilled and higher-wage jobs?

Identify, develop, connect and retain talent – Create an inventory of the skill sets of the local and regional workforce. Domestic corporate expansions and locations are driven primarily by the availability, ethical standards, knowledge and skills of a community’s labor force. This inventory should be used as the centerpiece of any marketing initiative. More importantly, communities must avoid the “brain drain” scenario by putting systems in place that develop the skills of the regional workforce and connect them with necessary tools, such as job training.

Develop entrepreneurial programs – Communities must establish an entrepreneurial program that will provide entrepreneurs with the tools necessary to develop and grow a business. Entrepreneurs drive innovation and the development of innovative, value-added products and services. Systems must be put in place that will provide entrepreneurs with the tools they need to prosper. This could include access to capital, available work space, networking opportunities and small-business assistance programs.

Merge economic development and education strategies – Communities that do not combine their economic development and educational strategies will struggle tremendously in the future. This does not just entail higher education and workforce-training initiatives. It also includes K-12. A lot of communities are faced with the challenge of graduating high school students who have not been properly educated and trained for the jobs that exist within their area. Graduates then take jobs for which they aren’t trained or leave the area to find work. Local businesses, government, economic development organizations, schools, parents and others must all be a part of this initiative. These strategies should be combined at the local, regional and state levels. Ideally, the national government should be involved, but the U.S. government just does not get it. This country has waited too long for our national government to respond and provide assistance. It is time for local, regional and state governments to get involved.

Identify and eliminate obstacles – Too often, laws, permitting processes, tough regulations and policies, and negative press get in the way of creating and growing a knowledge-based economy. Lengthy permitting processes can force a company that needs to build a new facility within a two-three-month window to locate in a community that promises to meet a short building timeline that you can’t make. A local news station or paper that is consistently filling headlines with negative images and events within a community can hurt a community’s growth potential. Businesses do not want to locate in communities where there is great potential for being negatively portrayed in the local news.

Change measurements – Most economic development organizations continue to be measured on the number of new jobs generated, the increase in the tax base and the number of new facility and expansion announcements over the course of a fiscal year. This way of measuring must change. The number of expansions and relocations are nowhere near the levels that occurred prior to our most recent recession. In addition, current project sizes are smaller in number of jobs and investment. As a result, most communities need to adjust their economic development strategies to reflect this trend. Most jobs that are currently being generated in this economy involve innovation and a higher skill level. In order to counter this trend, communities must measure themselves via criteria that are in line with developing and growing a knowledge-based economy. The new measure criteria could include the number of new businesses, number of patents filed within the community, educational attainment, and income levels.

Establish career ladders – Many communities, especially rural ones, struggle with the lack of career-advancement opportunities. This is another reason people leave a community. Educational institutions, job-training facilities, economic development organizations and businesses must all work together to create an environment where everyone has the chance to work and live in the community of their choice, especially their home towns.

These are not very easy initiatives to undertake. If they were, everyone would be employing these tactics in their economic development programs. Undertaking these tactics will involve a lot of time, energy, effort and risk. The majority of the people who are unemployed in this country do not have the skills and education necessary to fill the jobs of the future. In order for our economy to grow and continue to dominate, we must employ initiatives that focus on developing and growing our people.

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David Chang

Wednesday, November 30th, 2005

David Chang May 7, 1982 – November 19, 2005

I am very sorry to report that David Chang passed away on Saturday, November 19, 2005, after a strong fight against stomach cancer.

David was born in Grand Rapids, MI, and raised in Beijing, China. He came back to Grand Rapids at 18 years old and graduated from Davenport University. David joined the staff of Whittaker Associates in April of 2005. He is survived by his mother and father; paternal grandparents, and many uncles, aunts and cousins in China. David will be buried with services in Beijing, China.

David taught us about courage, suffering, compassion and the importance of following our passion. He will be missed.

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