JCB

While coming to office, I have been observing a huge construction going on near the Phase I for the past few days. The site is really enormous, must be for some company’s huge office. To lay the foundation and pillars, the whole patch of land was dug up to a depth of approximately 8 – 10 feet. Huge JCBs were easily digging and moving a bucketful of earth. That was a wonderful sight! I wondered how many laborers and days it would have taken to complete that task if it were to be done just using shovels?!

Back in office, I googled a bit for these Machines – the JCBs and the search was quite an interesting read.


JCB stands for Joseph Cyril Bamford – the founder of the JCB Company! And to this day, I was under the impression that JCB is some jargon for the mechanical technology that is used in building those giant machines!

Born in England in 1916, Joe Bamford – or "JCB" as he is generally known – is recognized as the leading pioneer of the backhoe loader concept in Europe.

JCB is a dream of one man – its founder. Bamford started his business in 1945 manufacturing a tipping trailer with a £1 welding set in a 12 ×15 feet garage he rented in Uttoxeter, Staffordshire. Though he had limited resources, he had basic engineering skills and the vision to implement his ability in practical problems in abundance. He sold his first machine – a farm tipping trailer, at roughly ₤ 140 in the local market.

By 1948, Joe was employing 6 people. It was then that he turned his attention to making a hydraulic machine – Europe’s first hydraulic tipping trailer. This developed into a hydraulic arm for tractors – called a Si-draulic, one of JCB’s earliest commercial hits.

Soon after this, Joe Bamford applied his engineering knowledge to use hydraulics technology in manufacturing loaders, which led to the concept of Backhoe Loader in 1954. This is now better known as the “JCB”.

Apparently, Joe Bamford was possessive about the JCB brand. In 1958, he bought 10 scooters with the number plates JCB1 to JCB10. JCB over the years has purchased registration plates for all company cars, which incidentally are all white. JCB own numbers 1-14 and 17-20 but JCB 15 and 16 are still missing!

In the 1960s, JCB introduced the 3C machine. This was again a hot selling machine, like the Backhoe Loader, selling around 3000 units in 1964 alone!

Apart from an engineering genius, Bamford was a great marketer, too. The 3C machine had a facility provided in the cab, to boil a kettle for the operator. Of course, this was heartily welcomed by the operators who had to spend continuous hours operating the machine. Bamford, himself, would present these special JCB kettles to the machine operators as a goodwill gesture!

Bamford’s publicity skills were also evident when he began the tradition of JCB ‘stunts’ in the 1960s. Elaborate maneuvers performed in front of the TV cameras – such as driving a car under a machine raised up on its hydraulic arms – showed the versatility and power of the machines and began the tradition of the ‘Dancing Diggers’ shows which are now famous throughout the world.

Entering the North American Market in the 60s, JCB soon became a major player in agricultural and construction vehicle industry. Bamford was aware of the fact that to be a good exporter, he needs to prove the customer why JCB is special and how much care and attention to details is paid while manufacturing the machines. But, JCB was situated in the Midland. The clients had to make a long journey to drop by the JCB factory. Bamford, therefore, bought an aircraft and a helicopter to fly the visitors to Rocester, a tradition that continues to date.

As a distinguished mark of Joe Bamford's achievements, he was awarded the CBE by Queen Elizabeth in 1969 for services to export. He has also received honorary doctorates in Engineering, Technology and Business Administration from several European universities.

Sir Anthony Bamford, son of Joseph Bamford, took over the reigns of JCB and has only expanded the business manifold. Under the leadership of Anthony Bamford, the company began expanding its product range, such as the hugely successful Loadall telescopic handler, wheeled and tracked excavators. By 1994, JCB’s product diversification had paid off, with £140 million of its £565 million sales coming from products launched in the previous five years!

Today, JCB produces over 160 types of machines for uses spanning construction, industry and agriculture. Sales have reached the £1 Billion mark and much of its growth is coming from the new products. The products range from the JCB Micro that can fit through a normal hall door to machines that are as big as houses. In industry terms, they range from mini excavators, backhoe loaders, skid steers, tractors, telescopic handlers, wheel loading shovels, wheeled and tracked excavators and dumpers.

The company is also investing in its India subsidiary, JCB India Ltd, based near Delhi, where it produces 3.000 backhoe loaders per year, as well as Loadalls and wheeled loading shovels.

The company that began as a ‘one man Army’ now employs over 5,000 people and has bases in the UK, the USA, India and South America. It also sells a full range of equipment in over 150 countries.

Well, the statistics themselves are convincing enough of the success JCB has achieved today. But I believe, and as I have said in the earlier Gyan as well, that any entrepreneur’s dream would be to see his product / company to be so popular that it would be used as a synonym for some activity. Today, the dictionary description for JCB reads like: JCB n. Trademark. A type of construction machine with a hydraulically operated shovel on the front and an excavator arm on the back (named from the initials of Joseph Cyril Bamford, its English manufacturer). Well, looking over from the Heaven, Joe Bamford would surely be more than happy…

Regards,
Abhishek

“Losing My “Virgin”ity”: Sir Richard Branson

Well, after discussing personalities like Richard Feynman and Ted Turner, today’s Gyan is a sort of “Hat Trick” of the Mavericks. In fact, if there could be a synonym for the word “Maverick”, that’s him. His dream career so far is like that fairy tale of Midas; whatever he touches turns gold. It’s not that he’s always blessed with good luck nor had he inherited a chunk of money. He is a self made millionaire – a billionaire rather, who has earned every single penny of his wealth through tenacity, innovativeness, guts and above all, his showmanship to proclaim it larger – than – life. He’s none other than – Sir Richard Branson…

Branson, born in 1950, was schooled at Stowe school. This dyslexic boy was more interested in entrepreneurship than schooling. At the age of 16, he floated a magazine called “Student” which was an immense hit. Branson was smart enough to give his readers something new with every issue of “Student.” At times he would call up, with a fake elderly voice, the then youth idols like Beatles and set up a quick interview with them. Interviews like these would help “Student” reach at the top of the popularity.

Those were the days of Hippies and communes. Though, Branson refrained himself from doping etc., he looked no better than a hippie and so was his lifestyle. An avid music lover himself, Branson didn’t quite like the way Music stores were run back in those days. It was hard to get the latest music records. Branson had an idea: Get the latest records and mail them to the interested buyers with some amount of commission. So, in 1970, he started the Virgin Mail order Record Company. Story goes that he asked his fellow partners to come up with a name for their company; some suggested names pertaining to music like “Disc” etc. Eventually, they selected “Virgin” because Branson wanted a unique name for his company – a name that would suit anything and still, would sound incredibly catchy. Well, it turned out to be a good decision as the Brand “Virgin” suited very well with their other products and services to come in future.

With the immense popularity of Virgin Mail Order Record Company, Branson started “Virgin Records” along with Nick Powell. The shop was situated on first floor of the building. It was the ideal place for any music lover. You could just pick up any disc and sit leisurely, listening it for hours! The shop soon got a cult status amongst the young people. Branson got into signing musicians and bands for his record companies. The young voice of Mike Oldfield appealed Branson and he decided to launch him. “Tubular Bells” was recorded at a mansion – turned – Recording studio and it immediately became a best seller. This set the foundation for Virgin Records who then went on to sign popular bands like Genesis, Peter Gabriel, Phil Collins, Simple Minds and The Rolling Stones. They, also, got into controversy for signing punk band Sex Pistols who were turned down by other record companies earlier.

In the mid-1980s the Branson Company was floated on the Stock Exchange, but the Branson style of business didn't fit the way City institutions expected public companies to behave. So he bought the company back from the shareholders!

By 80’s, the company was well established. Branson could have just lived lavishly with his fat kitty. But then again, it’s not Branson. In 1984, he floated “Virgin Atlantic” airlines. Prompt customer service, suitable timings, plushy planes (and beautiful air hostesses) made Virgin Atlantic popular amongst the passengers. So much so that it started giving tough competition to the Goliath “British Airways”

BA took the competition to such a level where BA was literally stealing Virgin’s passengers. BA used to call up the passengers who have already booked their tickets with Virgin saying the Virgin flight is delayed / cancelled and that BA could offer them tickets at much cheaper rates. False campaigning against Virgin and other such tricks had really made Virgin go out of the business. Virgin planes were denied landings and technical assistance. The whole affair was called “Dirty Tricks”. It was getting harder for Virgin to keep the cash flowing for the Airline business. To find the money Branson had to sell his beloved Virgin Records to Thorn-EMI. Even so the price, agreed in 1992, was huge, at almost £500million.

Finally, Branson sued BA for libel in 1992. King – the BA Chairman - countersued Branson, and the case went to trial in 1993. British Airways, faced with likely defeat, settled the case, giving £500,000 to Branson and a further £110,000 to his airline; Additionally, BA was to pay the legal fees of up to £3 million. Branson divided his compensation among his staff, the so-called "BA bonus." A local newspaper ran a headline story “Virgin screws BA!”

Apart from trying adventures in business, Branson gets into adventure in real life as well. In 1985, Branson set out from New York to beat the record for crossing the Atlantic by boat, but barely a hundred miles from home the boat had hit some floating driftwood and sank. He and the crew had to be rescued from the sea but the escapade made him and his company household names.

A year later the then Prime Minister Margaret Thatcher was congratulating him on the fastest ever Atlantic crossing in a new boat, but it was not enough for restless Branson.

Soon he was setting out to be the first to cross the Atlantic by hot air balloon. That trip, too, nearly ended in disaster.

At the end of the journey, the balloon, out of control, repeatedly ditched in the Irish Sea. Branson and his pilot Per Lindstrand, jumped. Once more he was plucked from the water. (Per Lindstrand held the world record for reaching the maximum height in hot air balloon till now. It was broken by an Indian businessman and Raymond Chairman Vijaypath Singhania)

In June 2004, Sir Richard set the record for the fastest crossing of the English Channel by an amphibious vehicle to mark the 20th anniversary of Virgin Atlantic. He and a fellow adventurer Steve Fossett also unveiled an aircraft designed to attempt the first solo-piloted non-stop trip around the world without re-fuelling.

Whatever Branson does, has to be flamboyant, big and loud. To take on Coca Cola, he jumped in the Soft Drink market. He launched “Virgin Cola” in New York, sitting in a war tank and crushing Coca Cola canisters!

Branson has been tagged as a 'transformational leader' by management lexicon, with his maverick strategies and his stress on the Virgin Group as an organization driven on informality and information, one that's bottom heavy rather than strangled by the top-level management.

He became “Sir Richard Branson” when he was knighted by the Queen in 1999 for his business prowess and exuberance for the spirit of the United Kingdom.

Today Virgin is into as diverse industries as possible, like air and rail travel, mobile phones, finance, retail, internet, drinks, hotels and leisure, with around 200 companies in over 30 countries. For Branson, every new business opportunity is like a challenge and he enjoys it thoroughly. While googling for “Virgin”, the search showing the companies under Virgin umbrella, really left me astonished. Some of them were: Virgin Atlantic, Virgin Nigeria, Virgin Blue, Virgin Mobile, Virgin Cars, Virgin Wines, Virgin Student, Virgin Money.com, Virgin Energy, Virgin Travelstore.com and last but not the least: his latest adventure “Virgin Galactic” In September 2004, Sir Richard signed a £14m contract to have five "spaceliners" built in the US, set to take Virgin passengers into space by around 2008!

There is an autobiography of Sir Richard Branson: “Losing My Virginity” which in fact, is a telling story of how he built his maverickly diverse empire named “Virgin”!

Regards,
Abhishek
P.S.:
1) If I’m not mistaken, Branson was thinking of taking over Air Deccan or starting his own Airline for domestic air travel in India. If that happens, well, nothing like it! J

Captain Courageous: Ted Turner

“Tez… Sabse Tez.” “Profit from It” ‘Smart News for Smart People” “We bring the world to you” … and so on… The endless list of 24 × 7 news channels only underscores the importance of the much needed information about the happenings around, in this fast moving world. Be it the latest tape released by Laden, Gates’ visit to India, Lathi charge by Police in Mumbai or the Sensex reaching 8895 mark, anything and everything that is happening around the globe would be delivered to you right at the moment it is happening, no matter even if it’s unfolding thousand miles away from the sofa you are cozily laying back in!

The days, when there would be a daily dose of news at a specified time by the long faced, nerdy – looking news readers on DoorDarshan, are long gone. All we want is the latest happening – the “Breaking News” Well, even when the ethics followed by the news – hungry channels are questionable, one person should be given a due credit for freeing the news from the bounds of time and changing the way we look at the world. It’s Ted Turner.

Born in 1938 in Cincinnati, Ohio, Ted Turner inherited the marketing skills of his father. At the age of nine, his family relocated to Savannah, Georgia, where his father built a successful billboard advertising company. Young Ted spent eight years at McCallie School, developing a love for the classics, an aggressive streak as a sailor, and a grasp of history.

He received a degree from Brown University, where he was vice president of the Debating Union and commodore of the Yacht Club. Both of these were to play an important role in his life later.

His father committed suicide in 1963. Story goes that Ted’s father had only 3 ambitions in his life: To become a millionaire, to own a big house and to have a yacht. The day all of them were fulfilled, he committed suicide. This led to Ted sitting at the wheels of the family business – the “Turner Advertising Company”.

Ted decided to jump in the Television Broadcasting industry. He bought an ailing UHF Television station at Atlanta and started broadcasting old movies, sports, and sitcom reruns. In 1970, Turner Broadcasting System (TBS) was launched.

1975 proved to be the fateful year when this “Mouth from the South” launched “Superstation” – a Satellite Transmission channel. He was up against the big players in the market at the time. But he debated bravely in the Congressional hearings and won Federal Communications Commission’s approval for his scheme. Very soon, TBS managed to reach 80% of the US homes.
“Mouth from the South”
On June 1, 1980, Turner inaugurated CNN (Cable News Network), the world's first, live, in-depth, round-the-clock news television network. To a public used to highly-edited, 20-minute nightly news shows, the network offered something addictively new: 24 × 7 news. Though competitors like Sam Donaldson mocked at CNN dubbing it as "Chicken Noodle Network," Turner's venture was such a success that it prompted Turner to start another channel, “Headline News” just two years later. C.N.N. covered worldwide news as it unfolded, bringing events like Poland's Solidarity movement, China's Tiananmen Square uprising, and the 1991 Gulf War into American living rooms. Going into the 21st century, C.N.N. would command an audience of 165 million households worldwide! Launched in September 1985, CNN International serves as the company's global news service and is distributed in more than 210 countries and territories worldwide.

In March 1986, TBS acquired the MGM library of film and television properties. This library formed the foundation for TNT, launched in 1988. Also, In December 1991, Turner acquired the rights, library and production facilities of Hanna-Barbera Cartoons. Cartoon Network, launched in 1992, showcases the company's vast library of cartoons and original productions.

His stint doesn’t end here. An avid sports lover, he purchased Atlanta's professional baseball team in 1976 and its basketball team a year later, to broadcast their games on TBS.

He left US mesmerized by winning the coveted “America’s Cup” – the yacht racing championship. He successfully captained his 61-foot yacht, Tenacious, through a Force 10 gale in 1979 to win a disastrous ocean race in which only 92 of the 302 boats survived, and 19 people were killed! The “Captain Outrageous” was then, truly called the “Captain Courageous”

Finally, Turner sold his company to Time Warner in 1996, and resigned from its management in 2000. Since then, he has thrown his energies into environmental and global peace initiatives. In early 2001, Turner launched the Nuclear Threat Initiative (NTI), a foundation working to close the growing and increasingly dangerous gap between the threat from nuclear, chemical and biological weapons and the global response.

He has also given away a generous $ 1 Billion donation to UN for the World Peace.

Apart from all this, he is, also, the biggest Ranch owner in U.S.!

Turner had seen his father committing suicide just because he had set himself modest goals and there was nothing else left for him to achieve in his life. A true lover of Life, Ted, however, sets himself goals like World Peace and a free, healthy environment which he knows, for sure, are hard to achieve and are ones he would wish to give his life for.

Turner’s is a story of passion and tenacity – a story of fighting against all odds and holding onto your position even when the whole world laughs at you. Hats off to such a courageous maverick leader!

Regards,
Abhishek

Richard Feynman: The Scientist Magician

Somehow, I find people having multiple facets to their personalities very interesting compared to the people who are good at a thing or two. They “poke their nose” for good in many fields and set a new benchmark. It is, in deed, difficult to be great at anything and everything you do. These are the blessed people who question the system. They break the image that we have in our mind - our frame of reference. In yesterday’s Gyan I had briefly mentioned a scientist – Richard Feynman. Today’s Gyan is about this Jack – of – all and Master of most of them scientist.

Feynman was born in May, 1918 in a small town named Far Rockaway near New York. He got admitted to MIT for graduation at the age of 17 and then, to Princeton. He would have continued with MIT but as he puts it, he knew that MIT is the best school but he wanted to see how the rest of the world is and hence Princeton! In the meantime, he had also started a company called “Metaplast Corporation”. The “Metaplast Corporation” was dealing in metal plating plastics. In this company with 4 employees, Feynman was the “Chief Chemist” but, alas, the basics of metal plating plastic bombed and the company doomed very soon!

Though a problem child who would always get into one or the other mischief with his experiments, he had earned popularity as the whiz kid who could fix any electrical machine, radios etc. Always curious about why things happen, he developed the skill to get to the depth of the things logically. No wonder, solving puzzles became his hobby. A story goes that in a dance party at MIT, a girl, who was famous (notorious?) for asking difficult puzzles almost fainted when Feynman answered all her puzzles even before she could utter the first few words of the puzzles! Feynman, apparently, had solved almost every puzzle known.

Soon, the World War II started. To serve the nation in its need, Feynman decided to join Army. He wanted to contribute in more meaningful ways, by which his knowledge of Atomic Physics could be applied. So he was put in Los Alamos “Manhattan project” that US had taken up to test the first ever nuclear bomb. The Manhattan project maintained so much secrecy that fake names were given to the scientists even in different time zones of US! Obviously, Los Alamos looked more like a Military camp than a lab. There were strict rules, censorship as per the Military regime. Feynman – a non believer in these so – called rules – wouldn’t let go of any opportunity to find loopholes in the system. He had found an alternate way to get out of the Los Alamos town, bypassing the sentries at the main gate. While leaving, he would make an official entry and would return through the alternate way. Then, again, he would go out officially leaving the sentries baffled to investigate when this man came IN in the first place to go out!

Another story is related to his mail correspondence with his first wife who was bedridden in Albuquerque. Feynman found the 1/243 = 0.004115226337 very “cute” and thought of sharing it with his wife. The letter was outrightly rejected by the authorities stating “Letters to be written only in English, Russian, Spanish, and German etc. No codes.” Feynman was prompt to fight tooth and nail to convince the authorities that it’s not a code. Of course, this was another way of his taking revenge on the rigid system. He, also, went on to ask permission to use Arabic Numerals!

Nonetheless, Feynman was very instrumental in the production of the first Atomic Bomb. He, also, got famous for his ability to question even the experts boldly.

For Feynman, learning every new thing was a challenge in itself. I think, that’s why he was always curious to learn more and learn different things. He learnt and moreover, mastered Italian. He became a proficient safecracker just because he found locks as interesting as puzzles. During his short stay in Brazil, not only did he learn Portuguese (so that he can deliver his Physics lectures in Portuguese for the students to understand them better) but also Bongo – the instrument! Hard to believe, but he also participated in the Carnival and a ballet, playing Bongo like a pro – player.

He, also, tried his hand at paintings. An exhibition of his paintings was arranged which was very well received!

He has penned bestsellers like “Lectures by Richard Feynman” “Surely, you’re joking Mr. Feynman” etc.

And apart from doing all this, he has also won the Nobel Prize for functional integral formulation of quantum mechanics and his contribution to Nuclear Physics in 1965! Also, he has left his mark in many fields of sciences like String Theory, M theory and the list is endless…

I guess, it won’t be exaggerating to say that if there is a perfect man, after Leonardo Da Vinci, it’s Feynman.

Feynman died on 15th February, 1988 due to Cancer. Reportedly, his last sentence was “I don’t want to die twice, it’s so boring”! It’s no surprise comment from a man who always sought the joy in everything he did.

Feynman always made a point to learn the subject with basics, instead of accepting things the way they are or just because some expert says so. He was great at explaining things using routine examples. This made him popular amongst the students as well.

What appealed most to me about Feynman is that while reading his book “Surely you’re joking Mr. Feynman, he appears anything but a typical absent minded, thick glassed scientist. Somewhere, we, at least I, can’t imagine a scientist wooing women, playing bongo in carnivals, cracking safes and doing all such things.

Of course, there are scientific terms, jargons and references of laws but they had never looked so friendly! Feynman hasn’t discussed any law or concept, but even the logical approach he takes, to the smallest routine things that we tend to ignore, gives you an idea what this man would have achieved in Physics. Throughout the book, expressions like “That was exciting”, “It’s wonderful” “That’s the funniest thing to happen” tell you that this is a man who enjoyed every moment of his life. And I believe, there can’t be any bigger success than living your life to the fullest.

Well, what exactly Richard Feynman is can be better expressed by quoting what Hans Bethe – his colleague and a Nobel Laureate himself – said about him:

“There are two types of genius. Ordinary geniuses do great things, but they leave you room to believe that you could do the same if only you worked hard enough. Then there are magicians, and you can have no idea how they do it. Feynman was a magician.”


Regards,
Abhishek
P.S.:
I had started with the intention of writing about another maverick personality from Management but strangely, I ended up writing about Feynman. May be it’s the magic of that word – “Maverick” or that of Feynman – the Magician!

Nanotechnology

Does this look like the IBM Logo? Well, in deed, it is and it’s not here because I’m going to write something more about IBM today, again.

Today’s Gyan is not about any individual or a company but about a technology that is promising to change the world.

Welcome to the world of: Nanotechnology – The technology of small…. Very small!

“N is for Nanotechnology and HP is the leader in this technology of limitless possibilities” The HP Invent ad flashes on the TV and leaves you wondering about the technology that boasts to offer a cell phone even for an ant!

It all started with a speech by Richard Feynman – The Nobel laureate “Jack – of – all” scientist. In his speech - “There’s plenty of room at the bottom”, Feynman envisioned small machines working at the atomic level. Then in 1983, an MIT professor Eric Drexler penned a research paper named “Engines of Creation” in which he extended what Feynman envisaged. Later on Scientists like Richard Smalle (who died recently) built upon these concepts to produce some tangible stuff like Nanotubes and bucky balls etc.

As Moore’s law (remember, Intel’s cofounder!) states, “After every 18 months or so, the size of the chip will be halved while its speed doubled.” So far, it had been proved correct. But the cause of concern is that if the size of the chip goes on reducing at such a pace, a quantum mechanics effect called “Tunneling Effect” would come into picture preventing flow of electrons. This will lead to a stage where it won’t be possible to reduce the chip (and hence, the computer) any more.

Centuries back, Charles Babbage built a computer using gears and other mechanical devices. What is a computer!? Basically, it’s just a set of switches. For calculating 3 + 1, appropriate input switches for 3 and 1 would be flicked and the answer/output switch would get set to 4. So, though bulky, it was possible to make such a set of switches using gears, etc. Now, if we were to build a mechanical computer today, it will still be bulky. But what if the teeth of the gears are an atom wide and are put on a shaft made up of carbon nanotube? Then, it will be possible to create a computer in nanometer scales! Even though Mechanical signals are slower than the electrical ones, the distance they would have to cover would be much less, making them more effective than electric signals.

Well, it’s not all fiction. Scientists have successfully created Carbon Nanotubes – tubes having diameter in Nanometers. Nanotube is just another type of Carbon like Diamond, Graphite. Another by – product of nanotechnology is Bucky Ball. It’s a football shaped closed structure of 60 or 70 Carbon atoms. This is the most stable structure of Carbon. The stability can be well imagined by the fact that even when the bucky ball is slammed into a wall at a speed of 37000 Km/h, it would bounce back without any permanent deformation!

Once the Nanocomputer is built using nano gears and nanotubes, it would be used to create Nanorobots. These nanorobots would be, obviously, at the nano level. This is where the Cell – Phone – For – Ant thing comes in picture. Nano robots can be “programmed” to do diverse tasks. Basically, atoms, as we know are the building blocks of any substance. The idea is that it is possible to convert one substance into another substance having same constituent elements just by restructuring these building blocks – the atoms. For example, Petrol or plastic both are, essentially, made up of the same elements i.e. Carbon, Hydrogen and Oxygen. It is just that the way they are bonded and oriented that makes them Petrol or Plastic. So if we can rearrange the atoms in Plastic by some means, we can create Petrol out of Plastic! Machines named Universal Assembler and Universal Disassemblers would “decipher” the structure of the atoms and Assembler would reassemble them to produce the desired substance. So, the specifically designed and programmed nano robots would rearrange the atoms to make absolutely anything out of anything!

It may sound a bit miraculous, but the nano robots could be programmed to kill cells. This means that they can be used not only to kill cancer cells, tumors but also to reach the specific organ which is in danger. The days aren’t long when if someone is diagnosed with Cancer, then all he/she has to do is to take a pill (or something else) and lo and behold, the Cancer is cured over night!

Many companies like HP, Intel, and Samsung are investing a lot of money in the Research and Development of Nanotechnology. In US, startups have already started cropping up, having any form of the word “Nano” in their names!

Companies like Nanosys, Hybrid Plastics, Chemat Technologies, Luxtera are considered amongst the top 10 companies in the world in the field of nanotechnology. Well, you might not have heard of them because all the work they are doing is at the Research level and it is still long way to go before these inventions could be used in practice.

Oh, and by the way… the IBM Logo that you had seen up there, is made up of 35 Xenon atoms and the image is taken by Scanning Tunneling Microscope.

Regards,
Abhishek

Microsoft: The Rise of the Empire

As described in the earlier Gyan, IBM had decided to “outsource” the job of writing the Operating System and other softwares to other vendors.

Jack Sams, who was working under Bill Lowe in the IBM’s PC Project, was given the job to find out the probable candidates who would write softwares for the IBM PC.

He was going to make a call that was soon going to change the fate of a person and… that of many others.

Sams wanted to write programs that would run on BASIC. While looking out for the vendors who had written BASIC compilers for other computers, Jack Sams came across a 24 year old college dropout from Seattle and his company - Microsoft. He called up Bill Gates – the “President” of Microsoft to ask if they could discuss about the BASIC Compiler. Bill Gates replied “Yes, any time in coming two weeks” Sams was prompt to ask, “How about tomorrow?” Gates was taken by surprise by this urgency because he was familiar with the sluggish ways IBM works.

The very next day, Sams was welcomed by a person who looked no older than 16. To his surprise, he later came to know that THIS was Bill Gates! Sams, as per the tradition with IBM, made Bill Gates sign on a contract that allowed IBM to use whatever Bill Gates may say but not the vice versa. That was a standard practice for IBM when dealing with any one else and IBM was, back then, such an influential company that everyone complied to it without much fuss.

Gates had also invited Steve Ballmer – a friend of his who was Harvard Management drop out. May be he wanted to impress the team from IBM! They talked over for 3 hours but Sams was shrewd enough not to give a slightest idea to Gates that IBM is thinking of building its own PC. Sams was very impressed with Gates but said, while leaving, that, “Don’t be under the impression that you have made the deal. We’ll get back to you if we have something for you”

Microsoft had started in 1976, with writing BASIC for the first computer “Altair” which was built by a company named “Mitts” owned by Ed Roberts. Soon, as Altair and Apple became popular with the hobbyists, BASIC too gained popularity. But software piracy was in existence back then as well. The hobbyists used to copy the authentic versions of BASIC and pass them on to others. Gates was infuriated to know about this, so much so that he had written an angry open letter to all the hobbyists condemning them for using pirated copies and pleading them not to continue with the practice. Hobbyists, obviously, didn’t quite appreciate the letter and became hostile towards Gates. I guess, this was the start of the hatred towards Bill Gates!

Microsoft made sure that they have the rights of BASIC with them, even when they are selling it as a product.

Microsoft then had 31 employees and was working from Seattle – Gates’ home town. Sams’ visit was just to explore if Microsoft is capable to handle the task of writing BASIC compiler for the IBM PC. Two weeks later, Sams returned with 5 aides to see Bill Gates again. This time they had a deal. Sams told Gates everything about the PC project – “Project Chess”. Gates readily agreed to give BASIC to IBM. Sams asked him if Microsoft can write Operating System for the PC. But, Gates hadn’t had a ready OS at the time. He, in turn, asked Sams to contact Gary Kildall who owned Digital Research Intergalactic (DRI) DRI had an Operating System called “CP/M” which worked on a lot of small computers and was extremely popular. Gates, even, set up a meeting of IBM people with Kildall!

The CP/M operating system came out of work done by Gary Kildall, a consultant who worked for Intel in the early ’70s. While working at Intel, Kildall interfaced an 8-in. floppy disk drive to an Intel development system. To make the disk easy to use, to save and retrieve information, Kildall wrote a program he called Control Program/Monitor (CP/M).

Kildall offered CP/M to Intel, but the company suggested Kildall market it on his own. So, he set up Digital Research Intergalactic to sell versions of CP/M to computer hobbyists. Eventually, Kildall rewrote CP/M so it relied on a separate, small section of code that he or the computer manufacturer could quickly customize for different computer models. As a result, the concept of machine-dependent BIOS was born.

IBM team went to see Gary Kildall. But as it turned out, Kildall knew a lot about programming but not much about running a company. For some reason – and legends have many – Kildall was in flight and could not meet IBM team. Some say he was deliberately busy flying his own plane or some say he was returning from a business visit and couldn’t make it for the appointment with the IBM people. Whatever may be the reasons, the fact remained that he had missed a great – or perhaps, the greatest opportunity!

…IBM decided to give the contract of writing OS for Acorn to Microsoft…

As stated earlier, Microsoft hadn’t had a ready OS. But it knew who had. There was another company named “Seattle Computer Products” (SCP.)They had hired Tim Patterson who had written QDOS (Quick Dirty Operating System) SCP modified QDOS to suit the 8086 Microprocessor and shipped it with the name “86 – DOS” Through several business arrangements, Microsoft licensed and then purchased outright the exclusive rights to 86-DOS. It modified the 86 – DOS to run on the Prototype of PC built by IBM and later on tailored it to work on the actual “Acorn” And of course, they didn’t forget to rename it to MS – DOS!

So finally, when IBM PC was launched, it could run 3 Operating Systems: PC – DOS, CP/M and P – DOS. IBM had renamed MS – DOS to PC – DOS and sold it for free along with the PC. Even when some people found CP/M superior to MS – DOS, just because CP/M was more expensive than PC – DOS (MS – DOS) it couldn’t quite grab the market. MS – DOS, soon, became extremely popular. Microsoft was smart enough not to sell the rights of MS – DOS to IBM. So when IBM clones started eating IBM’s market share, Microsoft made sure that MS – DOS runs and gets sold with the IBM Clone PCs as well!

Much is written about how Microsoft became what it is today and what tactics they used to completely monopolize the software market. The history is well known…

What is not much known is that Gary Kildall died in 1994, almost unnoticed to the computer world. Novell acquired the assets of Digital Research, and Caldera acquired those rights in 1996.

Gordon Eubanks, president and CEO of Oblix and a former colleague of Kildall, said, “The real issue wasn't that Gary refused to talk to IBM. The real issue was that Microsoft had a much better vision for the business”

I sometimes wonder when somebody says, “I want to become Bill Gates”, do they really know how many Gary Kildalls, Ray Noordas have perished before and when a Bill Gates was made? Well, of course, I’m not a pessimist because, somewhere at the back of my mind, even I hum the song by Goo Goo Dolls when I read about Gates, “If I could be like that, I would give anything… Just to live one day (well, in fact, all of my lifeJ) in his shoes…“

Regards,
Abhishek

P.S.
1) Well, the timing for this writeup couldn’t have been better as Bill Gates is arriving in India tomorrow on a whirlwind tour.
3) It is yet another coincidence that it just turned out to be the 13th write up in this seriesJ Well, somebody had to be 13th, right?

IBM and Its PC

In yesterday’s Gyan, I had quoted the no. of employees back in 1984 and today. I had also commented that the numbers didn’t quite extrapolate to what they should have been. The most probable reason for this is the sharp rise and decline for IBM in the PC Market during the 80s. So today’s Gyan is about IBM and its PC.

IBM was ruling the Computers Market world over. Mainframes and related software were bringing major amount of revenue for IBM. In early 70’s, IBM had started working on a small “Personal” computer but the idea had lost its momentum in the bureaucracy of this gigantic organization.

What a company like IBM couldn’t do, a small company started by two young mavericks succeeded in doing. Apple made Personal Computer popular and obviously, IBM wasn’t happy to see Apple stealing the market under their nose. In July 1980, Frank Cary – the then Chairman of IBM - called an emergency meeting of the top brass to discuss about the project to build IBM’s own PC. He had succeeded Thomas Watson Jr. himself to take the charge of IBM. Even though, he was from the Mainframe generation, he perfectly understood the power of personal computer. That’s why he opened a separate department “General Services Division” (G.S.D.) from where everything except Mainframes was manufactured. AS400 was also a product of GSD.

“Where is my Apple?” He used to ask. Again, in this meeting, he got to listen to all cranky excuses about why the dream PC could not come into reality. To add to his fury, an engineer suggested that IBM should buy small computers from “Atari” – a video games company – and sell them with the IBM logo. Finally, a group said that it’s possible to design a PC but they needed funding. Cary barked,” That’s enough. I’ll allot you funding from my own budget but this job has to be done!” He, then, turned to Bill Lowe “Get some good people, find a work place and start working…I want this PC ready in a year from now.”

Bill Lowe started working on PC in Boca Raton in Florida. In his team was Lew Eggbrecht who was working on the Design of the PC based on Intel’s 8088 Microprocessor. Lowe himself was working on the marketing strategy of the PC; questioning himself will the IBM Salesmen like to sell the PCs? Or which OS should be used? Then, he decided to build the PC using off – the – shelf parts. IBM would buy the Microprocessors from Intel and would procure every other hardware component from outside vendors or will manufacture it themselves and assemble them. The main question now was of Operating Systems. Though writing OS was not a big deal for IBM, they wanted to get it written from some third party. The thought behind this was that the PCs would be sold in thousands. Now, if there is any problem with the OS, IBM engineers won’t be wasting their time running around fixing those issues. So let other vendors / third party write the OS… and as time proved, this was a major mistake.

IBM made Microsoft write the Operating System for the new PC. In fact, there were 3 operating systems that used to come along with the PC namely PC – DOS, CP/M and P – DOS but PC – DOS (developed by Microsoft) was given for free, so, naturally, it became popular.

In August 1980, the first prototype of IBM PC was ready. A demo was given to the then IBM Chairman John Opel who had taken over from Cary. Opel wasn’t much impressed with the demo. He was more worried about how to sell the PCs. Now, the project was named as “Project Chess” and the new PC was named as “Acorn” Soon, Bill Lowe was replaced by Don Estridge. PC had become prestige issue for IBM now. At the start of the year 1981 itself, the IBM PC was ready. The team, under Estridge’s leadership, managed a miracle. On 12th August, 1981 IBM launched its PC officially with a formal press release. It had a bunch of softwares like a software similar to VisiCalc, Basic Language, a word processor named “Easy Writer” and a couple of games “Microsoft Adventure” and “Donkey”! (“Donkey” was, apparently, written by Bill Gates and that, it seems, was the last time he wrote any code)

The day when IBM officially launched its PC, Apple ran a page long advertisement in almost all the newspapers across US. It read only 3 letters “Welcome IBM. Seriously…”

The war for the Personal Computer Market had begun. Even, Apple had aces like Mac, Lisa up their sleeves. But as discussed in earlier Gyans, they were far too ahead of their times. Additionally, there were disputes and ego clashes in the Apple II and Macintosh teams which affected Apple big way.

By 1984, IBM was clearly eating Apple Pie! So, finally, after Mainframes, IBM became a leader in PC. By the end of the year 1981, IBM had sold 93000 PCs. IBM enjoyed a market share of more than 25% and the share of Mainframes in IBM’s own business came down drastically to half!

Don Estridge got a lot of publicity as the “Father of the Personal Computer” Lew Eggbrecht, who had worked really hard for PC couldn’t stand Estridge taking credit for the PC. He started negotiating with an IBM client who in turn, taped all the conversation and sent it back to IBM. Eggbrecht who, in deed, was the real father of the IBM PC was fired from the company. Estridge commented, ”We have kicked out a thief amongst us!” Estrige died shortly in a plane crash.

As mentioned earlier, the IBM PC was made up of off – the – shelf products as follows: IBM PC

8088 microprocessor and peripheral chips—Intel

5¼-in. floppy disks—Tandon (Western Digital acquired Tandon in 1998)
Power supply— Zenith (Zenith sold its computer business in 1989 to Groupe Bull, which later sold it to Packard Bell NEC. Packard Bell no longer exists.)
Printed circuit board—SCI
Printer—Epson
Keyboard—IBM (Lexington, KY)
Monitor— Various Asian manufacturers
Software: Microsoft, DRI (Digital Research Intergalactic) etc.

The obvious question is: if everything is manufactured by others and all IBM is doing is just assemble them, then why can’t anyone else do it!? There is a catch… IBM had written the “BIOS” (Basic Input Output System) which carries the specifications of the components as designed and standardized by IBM. So it was not possible to assemble these components because IBM held the key – the BIOS.

But soon, Rod Canion, Jim Harris and Bill Murty from Texas Instruments managed to crack the BIOS and that was the beginning of the end for IBM. Shortly after this, IBM Clones – better known as IBM compatibles – started coming in the market. They were as good as, or rather much better, cheaper and more flexible than the IBM PC. Compaq managed to hit the market with its own PC based on the 80386 microprocessor well before IBM.

IBM started losing its share of Personal Computers market. Neither was it a leader in PC market nor was it ahead in Mainframes, too.

Unknowingly, IBM helped Intel and Microsoft grow!

To know how that happened, watch this space on Monday!

Regards,
Abhishek

IBM and Thomas Watsons

In his book, “Frontiers of Management”, Peter Drucker (who is hailed as “The Guru of the Management Gurus”; He died recently) wrote, “It’s a misconception that Thomas Watson Sr. built a BIG company named IBM. It was Thomas Watson Jr. who, entering the company in 1946, made it big. Watson Sr. just founded a midsize company but Watson Jr. made it a behemoth.”

Well, whoever has made the contribution, the fact remains that IBM IS big. And how much big? Just to quote the numbers, though dated, in 1984, the IBM payroll had 4, 90,000 names; in 1987, the company’s turnover was $ 54 Billion - higher than the GDP of Greece ($ 40 Billion)!

Every big thing has to start from scratch and it was Watson Sr. who did it. Thomas Watson Sr. was born in 1874 in Campbell, New York. His first job was at age 18 as a bookkeeper in Clarence Risley's Market in Painted Post, N.Y. Later he sold sewing machines and musical instruments before joining the National Cash Register Company as a salesman in Buffalo. NCR was run by John Patterson. This is where Watson Sr. learnt how to sell aggressively. Six years later, his boss and mentor, the powerful John Patterson, assigned him to a secret project to put competitors out of business. Partly because of this covert sales warfare, Watson, Patterson and others would be prosecuted in 1913 under new anti-trust laws enacted to prevent business monopolies. Later on, in 1914, Watson Sr. joined a company called “Computing Tabulating Recording” as a General Manager in New York. 1914 was, also, the year when Thomas Watson Jr. was born.

The company’s turnover back in 1914 was $ 4.2 Million. It soon doubled to $ 8.3 Million in 1917. “Computing Tabulating Recording” wasn’t particularly into any of “Computing” or ”Tabulating” or “Recording” CTR used to sell a motley mixture of products like Balances, weighs, Knives, Coffee Grinders, Clocks and almost any other thing but computers (Of course, it had a long way to come into reality.) Additionally, the company used to sell “Tabulating Machines” based on the “punched cards.” (I think, these were the same punch cards Einstein used to work upon in the patent office). One fine evening in 1924, returning home, Watson Sr. declared,” Our Company will now be called “International Business Machines” Little Watson Jr. laughed at the idea of a company named “International Business Machines” selling Grinders, Knives, etc. And so did everyone else. But Watson Sr. used to think big… really big. He wanted to create the biggest ever “Business Machines” company.

Watson Sr. was smart enough to concentrate on the Tabulating Machines as the next thing in the market. So even when the Great Depression destroyed other industries, families, IBM was going great guns. In fact, in 1934 – in the midst of depression, Watson Sr. boasted a salary of $ 3, 64,432!

And as fate would have it, conditions couldn’t get any better when the Government approved an act named “Wages Hours Act” which forced the companies to keep records of Working hours and wages disbursed. All the recording machines available in the market at that time were incapable of handling such enormous amount of data. So invariably, it was IBM who, in 1944, introduced a machine named “Mark I” to provide the solution for this problem. And it had to be popular. I can’t imagine any better example where Government Policies have indirectly helped an industry grow! Mark I was soon followed by “Selective Sequence Electronic Calculator” – nicknamed Poppy in 1947 which again was a hit.

Watson Sr. had his principles. In the earlier years, he never sold his machines; he used to “lease” them. Also, the Salesmen were highly regarded and were the most important people in the organization. They were so skilled at their tasks that it was said they can sell a refrigerator even to Eskimos! As Watson Jr. rightly puts it,” Everyone at IBM is selling something at every moment”

IBM also, pioneered some of the great initiatives in Management. In 1958, they introduced daily wages instead of hourly wages which was the routine practice till then. Also, the concept of “Earned Leaves” is a gift of IBM. “Respect for Individual”, “Excellence and Superior Performance”, “Customer Service” and many other Management concepts were first thought and implemented in IBM. In fact, there were songs played at the plants to motivate the workers and the employees to work hard. One song goes like (Tune: Jingle Bells) “I. B. M., Happy men, smiling all the way. Oh what fun it is to sell our products night and day.” J Just for fun sake, PFA few other motivational songs!

Watson Jr. delivered his first speech at the age of 12 in the “Sales Meeting” in IBM. He went on to graduate in Mining from the Brown University and then, joined IBM in New York as a Salesman. He took a short break from IBM to serve in US Air Force during World War II. He was a B – 24 Pilot in the war. He resumed his job in 1946 after the World War. In the year 1956, he became President of the company, and in 1961, the Chairman. He handed over the active charge of handling IBM to rank Cary in 1972. Serving IBM for more than 30 years as a President and CEO, he became its Chairman Emeritus in 1989. He was also US ambassador to Russia for 9 years, as well!

In 1952, IBM created a computer, especially for the scientists, named Model 701. It was based on the concept of digital computer by a scientist Howard Aiken. The biggest decision that Watson Jr. took was about the “System 360” computer. The stake was as high as $ 5 Billion. If System 360 would have bombed, there would have been no IBM. But, it didn’t and in fact, was well received by the market. The company never again saw such “Do or Die” situation.

IBM stood tall as an example of how to run a successful company. According to Tom Peters, the secret of their success lies in the expertise in computers. But, according to Drucker, the top management would take the key decisions and would make sure that the people who are going to execute it should know why they are doing what they are doing.

The history of how IBM monopolized the early computer market and especially the Mainframes is well known. IBM had succeeded in creating a niche market in the field of computers. Whatever the Big Blue would say would be taken for granted. But the situation was soon going to change! Today, the numbers for IBM look like: Revenue: $96.3 billion; Net income: 8.4 billion; Total assets: $109.2 billion; Number of employees: 329,001. Somehow, the numbers back in 1984 don’t quite extrapolate to these numbers!

To know why, watch this space tomorrow…

Regards,
Abhishek

P.S.:
“I see a world market for 5 computers” – 1943, Thomas Watson Sr.

Lee Iacocca and Chrysler

…. There were two options Lee had, aged 54 by now, either to enjoy a retired life or take revenge of this insult.

Walter Chrysler
Lee Iacocca and Chrysler

As he puts it in his autobiography, “Lia – my daughter came to know about it and called me up. She was crying! I can forget what Henry Ford did to me but I can never forgive him for the way he did it and how it affected my family.” The choice was clear: Lee had to take the revenge…beating Ford on its own turf.

As soon as the news of Iacocca’s firing broke to the market, companies like Radio Shack, Westing House started their attempts to take Lee Iacocca on board. Who would want to miss out on such an opportunity! But Iacocca had spent almost 32 years in the automobile industry and was not enthused to change the field of his expertise.

Walter Chrysler, back in 1910s, was fascinated with Model T and the Cadillac, so much so that he opened and reassembled the cars many times. He went on to found “Chrysler Motors”. Right from the start, Chrysler made sure that their cars would be known for the High End Engineering. They had introduced many engineering wonders that are now common. Walter Chrysler died soon after retirement in 1940. From then on, the helm of Chrysler changed hands to people good at Finance – the Bean Counters. This slowly started reflecting in Chrysler’s product line as the cars went on becoming inferior from engineering perspective. The company wasn’t selling as many cars when its competitors like Ford, GM were seeing best of their years. The Oil Crisis was the last nail in the coffin.

The conditions couldn’t have been better for both Iacocca and Chrysler to join hands.

Within 15 days, Iacocca was looking for the address of Chrysler Motors. Chrysler was in bad conditions at that time. But Iacocca thought he could turn the situation within a year. But none of the executives gave him the precise idea as to where exactly - the 3rd leading Automobile manufacturer in US and the 10th biggest corporation in U.S. was heading. The company was not bleeding but hemorrhaging and no one bothered about that. When Iacocca studied the financial condition of the company, he came to know that he has boarded a sinking ship. But he couldn’t leave it in the midst of the deadly storm.

Now, he had to start the reformation and it started right from the top management. Chrysler was an empire built of small counties; each county having its own lord – the top executive like VPs - who cared the least about other counties’ wellbeing, let alone the whole company. He had to fire 33 out of the 35 top executives. To get the much needed cash flowing, he had to sell the Battle Tank division of Chrysler motors, which, in fact, was the most profitable subsidiary. He teamed up his old allies and some retired officials from Ford. He brought in Jerry Greenwald from Ford Brazil. There was so much competition and secrecy between the automobile manufacturers that Jerry met Lee at some airport with fake beard and makeup! He also brought in “Kenyan and Eckheart” as the Advertising agency for Chrysler. This proved useful in promoting the future Chrysler cars.

Chrysler Motors was famous for their engineering excellence but now they were notorious for leaking and unreliable cars. For instance, once at the launch of a new car, as the Mayer of the city turned the keys, the engine never roared to life. It was found that the battery in this new car was a dead one. Moreover, the dealers were not posting any order and the company has to keep the cars rusting in inventory. At the end of the month, the company used to have a “Fire Sale” where the cars were sold at any price less than the original price. So dealers used to buy their cars from fire sale only. Iacocca stopped this custom and made it compulsory for the dealers to post their orders in time and as per the requirement. Iacocca fired many of the workers just to have some cash in hand. But it was all necessary to keep the company floating because there were many adversaries who wanted Chrysler to go bankrupt.

Despite of these tough decisions, the company was running short of cash. So Iacocca took his toughest and wisest decision ever. As all the banks have already stopped giving any money to Chryslers, he asked for the loan guarantee directly to the U.S. government. This wasn’t a simple thing as he had to convince the government that the company had no plans to go bankrupt and with the given loan guarantee, it can survive and can pay back the loans. This was a mind blowing job. He had to stand before the congressional committee which questioned him about each and every aspect of the loan guarantee bill.

It all proved fruitful when government granted loan guarantee of $1.2 Billion which they had to return in a period of 10 years. At the same time, Chryslers launched their new car – the “K – car” which was an instant hit. Iacocca himself appeared in the advertisement to promote Chrysler motors, sending out the right signals that the Chrysler’s management and hence, the company has changed. Chrysler had lost people’s confidence to such an extent that Iacocca really had to appeal “If you can find a better car…… Buy it!” to make people at least consider Chrysler while buying a new car. Another trick was “Test drive our car and we’ll pay you $50!” Iacocca, who earned a salary of $ 1 million, even started taking a nominal salary of $ 1!

Thanks to such vigorous advertisement and the new improved management and quality, Chrysler could return the loan within 4 years compared to an allotted time of 10 years. Due to Iacocca’s effective management and leadership, Chrysler not only recovered from bankruptcy but also posted better profits than Ford. Today, Chrysler along with Daimler is one of the leading car makers in the world. It was all because Lee Iacocca and his effective team.

But the rollercoaster ride for Lee Iacocca didn’t end here. He became such an influential person in Chrysler that he owned a considerable amount of shares in Chrysler. Word spread that he wants to own Chrysler completely and… the board fired him! History repeats…

Apart from being a successful businessman, Lee is also a good natured father and a husband. He always had his weekend free for his family, no matter if the whole world is sinking. He was very much influenced by his father Nick. I can’t stop myself from referring a story about his father that will give a hint of what made Lee Iacocca what he is: Once, in an official meet, the top officers were enjoying a game of golf. Lee invited his father who never played golf in his whole life. His father struck the ball hard and literally started running after the ball. Lee shouted, “Walk dad, walk… there’s no need to run!!” and his dad, running at the age of 60, shouted back, “Why walk when you can run?”

Regards,
Abhishek

Lee Iacocca and Ford

Whenever a book on management is written about the people who managed greatest come - backs against all odds or who shook the system from the root itself, the saga can not be complete without taking note of this hero. No, I am not talking about Bill Gates, Sabeer Bhatia or anyone related to Silicon Valley. It’s not about getting quick money through dotcoms or anything like that. This comes from the good old core manufacturing industry. He is hailed as one of the best managers of our times. He is worthy of even more appreciation because he started, basically, as one of those techno savvy engineers who are not so keen about the main action part of any company - the Sales and Marketing. Yet, he blended his engineering knowledge with creativity and management in such a way that he became living legend forever. Meet Lee Iacocca…– The former president of Ford Motor Company and later on Chairman of Chrysler Motors. Today’s Gyan is about Iacocca’s stint with Ford.

Lido Anthony Iacocca was a shy, introvert boy from Allentown. His parents had emigrated from Italy to the land of opportunities in search of their great American dream. Lido’s father – Nick Iacocca was a born salesman. Starting as a mine worker, he later on owned a movie theater and a chain of hotels. One of the tricks he used to pull crowd at his theater was the scheme of giving free tickets to the dirtiest 10 kids. I’m not sure how it worked but it did. Soon, the golden days were over as the great depression hit US in 1929. Nick promptly opened hotel. The idea was even if every industry is in slump, people will have to eat!

Lido was a bright student right from his school days. He went on to pursue his Mechanical Engineering at Lehigh University. (A senior admirer used to call him “Lee High”) In his final years, a recruiting officer from Ford names Wellington McCormick Goodheart arrived at Lehigh University for the campus recruitment. The overall impression that Goodheart left and the Ford brand name made Lido passionate about getting into Ford and as it turned out, he was the only one who could make it to Ford. After completing his Masters, he officially joined Ford in 1946 as a trainee engineer. At the River Rouge Plant – the biggest automobile plant in the world, he was made to learn each and every process (right from Mining, shipping, designing etc.) of Automobile Industry over 18 Months. He had vowed that he would become the Vice President of Ford by the age of 35. But somehow, he wasn’t satisfied with the engineering work that he was doing. The aim of becoming a VP at 35 was looking pretty distant. He observed that the main action is in the Sales and Marketing.

Finally, he switched to Sales in 1953. He tried to sell the cars on the basis that they are safe. It didn’t quite work. It was in 1956 that Lido got his first break. In 1956, he sold the cars with the punch line “56 for 56” which was an instant hit. It not only increased the sales of his district but brought him under the eyes of the “Glass House” – the headquarters of Ford Motors at Dearborn in Detroit. This was a simple installment scheme in which the customer just needs to pay $ 56 first and then rest of the amount in small installments. With the instant success of “56 for 56”, he was sent to Chester where he got his real mentor in Charlie Bicham, then a regional manager, who really molded Lee in an ideal salesman and furthermore a businessman. It was Beacham who shortened “Lido” to “Lee” as the Southerners would find Lee more American than Lido or Iacocca

Iacocca always says that the basic principle is that any man, even if he had a bad or expensive deal, for some days he tells himself that he had the best deal!

His marketing strategy revolves around facts and figures but then, there is gut instincts involved, also. According to him, you may collect 95% of the information that you require to take a decision, it may take you 6 months to get the remaining 5%. And by the time, you start to implement it; it will be too late and you would have missed the bus. It’s the internal feeling or guts that are required to compensate those 5%. About his decision making in meetings he says, “I listen to all of them and finally say “OK, Guys, here is the decision.”

He always supported front wheel drive and fuel saving vehicles against the “Gas Guzzlers” which was the last thing Henry Ford II - the Ford Chairman ever wanted. Iacocca studied the market and observed that the generation born in the years of World War II was now grown up. This young generation wants a stylish, sporty but elegant car, a car which you can drive to a party, a picnic or college and still, it shouldn’t look out of place! Iacocca came up with a car with a long hood, a powerful engine, sporty look in the year of 1964. “The Mustang” was instant success. It was so much attractive that it is said that a truck driver slammed his truck into a tree when he lost his concentration watching Mustang. Another customer slept in the car until his cheque was getting cleared so that no one else can take the car away from him. Finally, Lee did become Vice president but at the age of 36. He was just about to become the president because of Mustang but suddenly Henry Ford brought Bunkie Knudsen from General Motors to become the president. Lee missed the Presidency. But, as fate would have it, Bunkie was fired within 18 months because he couldn’t make any difference to the company’s profit.

Finally, on 10th December, 1970 Lee Iacocca became the President of Ford Motor Company. He showed the most prosperous years to the company. He brought the ailing Lincoln Mercury division back into profit. Mark III and Fiesta added more feathers to his cap. But every good thing has to end. After an attack of Angina, Henry Ford started worrying about the share of his family in the company. He was afraid of Iacocca’s increasing influence. So he blamed him of having contacts with Mafias and had his enquiry set up just to harass him. This only proved Lee’s innocence, adding more fury to Ford’s wrath. So he started firing Lee’s allies like Hal Sperlich – the man who designed Mustang, followed by Bill Winn. Finally, he called the Board’s meeting to put that he is going to fire Lee Iacocca. All the directors opposed this foolish idea. Who can fire the money maker just because of personal grudge?

“It’s either him or me!” threatened Henry. The board gave up.

In this way, on 13th July 1978, after 32 years of glorious career, Lee Iacocca was fired after a heavy confrontation with Henry Ford. Ford had just earned $1.8 Billion in two years, the best ever. After he was fired, Iacocca was given a small cubicle near the warehouse. This was the worst humiliation as Lee enjoyed white – coated waiters, food from Paris and other heavenly perks in the earlier years. Henry Ford was so whimsical that he called Walter Murphy– an Iacocca ally at 3:00 a.m. in midnight just to ask whether he likes Lee. When he said “Yes” then “you are fired” was the answer. There were doubts about his integrity as well. After talking emotionally in the meeting for Development of Black people, he would abuse, curse them when drunk at home.

If you thought this is the end of it, you are wrong. There were two options Lee had, aged 54 by now, either to enjoy a retired life or take revenge of this insult.

Watch out this space tomorrow to know what he chose!

Regards,
Abhishek

Goal - Eli Goldratt

I just happened to read a book named “The Goal” by Eli Goldratt over the weekend. So today’s Gyan is about this interesting Management Novel.

The best thing I liked about the book is its style. Generally, Management books tend to get a bit boring with all the management jargons, graphs and tables that they use. Instead of writing management fundamentals this way, Goldratt has spun a story around them, making the book more readable and interesting. Even though, the book is mainly aimed at the manufacturing industry, there is lot to learn for people like us working in IT.

Alex Rogo – the “Hero” of this novel - is a plant manager in a town called Bearington. One fine morning, his divisional manger Peach storms into his plant asking for the status of a delayed customer order. Peach is prompt to bash Alex and orders him to ship the order by end of the day. He, also, goes on threatening him that if he (Alex) couldn’t turn the plant into a profitable one within 3 months, the company would be left with no other option but to shut down the plant. To add more to Alex’s misery, a critical machine goes down and a skilled worker leaves the plant over a feud with the Divisional Manager. However, Alex somehow manages to ship the order within time limit. This incident and especially, the frequent delays in delivering the orders make him think. Why is it that even after he is giving his best try to every order, even after all the processes are in place, he has backlogs of weeks for orders to be delivered, piles and piles of inventories, unhappy workers to work with.

Alex is not doing any good at his personal life, either. He has no time for his kids and his wife. In fact, their marriage is falling apart.

Alex looks a complete loser in both Professional and personal life.

One day, when Alex is on his way for a Quarterly review meeting, he meets his old school friend Jonah at the Airport. Alex remembers bleakly that Jonah is a scientist. In a casual conversation, Alex boasts about the new Robots that his company has deployed at his plant to boost productivity. Jonah asks him, “Have those Robots really improved productivity?” Alex leafs through the pile of pages and tells him “Not sure.” Jonah goes on asking him few basic questions which Alex can’t answer satisfactorily. Jonah asks him to spare some time on what is that Alex is looking for and what his, company’s GOAL are. Alex mulls over and over on these questions only to find a simple answer “To Make Money” Anything, which helps in making money for the company, would be a productive activity and any other thing which doesn’t, would simply drive the company away from its goal.

Goal of a company should be:
1) To increase throughput i.e. the quantity that they are Selling
2) To decrease the Operational Expense: This should include the time spent on processing, Inventory etc.

Once the goal is explained, Goldratt goes on explaining how to achieve it using practical, routine examples. For example, while explaining how bottlenecks decide the throughput of the plant, he takes Alex on a hiking tour along with some kids. No matter how many times Alex sets the pace for every boy in the group, the gap between them goes on increasing. Also, together they move at such a slow pace that it would become impossible for them to reach the destination in time. Alex finds out that a fat guy named “Herby” is moving very slowly and because of him, other guys behind him are lagging even when they CAN be faster. This effect goes on accumulating till the last boy, resulting in overall delay. So Alex makes Herby the leader and as it turns out, the gap narrows and they reach the destination well before the stipulated time.

On the similar lines, Alex finds out the Bottlenecks – “herbies” in his plant. He makes necessary changes in the policies and scheduling. He prioritizes the parts. One important thing that he learns is that “If a resource is utilized to the fullest, it may not necessarily be fully productive” i.e. if it is non – bottleneck resource and is working up to its capacity, it will create excess parts for the bottleneck to handle. This will result in higher inventory implying a stuck cash flow.

With bottlenecks found and strategies set, Alex manages to reduce the backlogs dramatically. With effective support from his colleagues, he could deliver the orders well within the timelines.

Eventually, Alex turns the plant around and makes it the most profitable one in the entire division. He is also promoted to Divisional Manager. Needless to say, he also manages to continue with his marriage! (All things come to a goody goody end)

Even though lots of things said are sheer common sense, it is interesting to read how misguided efforts prove futile and how they tend to give us the feeling that we are extremely busy. It also shows how we take the predetermined policies for granted and how these assumptions make us overlook obvious false practices.

Well, as Goldratt puts it, it is difficult to explain what a Goal is or should be. Due to space constraint, I have missed a lot of other good points that would have made the review more interesting but I found the book (especially, the talks between Jonah and Alex) much better and practical than any other self help books and I’m sure, even if it is read as a plain novel, it would still make an interesting read.

Regards,
Abhishek

P.S.:
I just happened to come across a quote by an IAS Officer “My experience with bottles so far has told me that the bottlenecks are always at the top.” Of course, the context was a bit different; it was about the Indian Government! J

FedEx - Frederick Smith

It would be dream of any entrepreneur to see his product/company so popular that it will be known as a synonym of something. For example, Xerox Inc. has made the Xerox Copier so popular that the process of Copying is now better known as Xeroxing. Another recent example could be Google. The story goes that Larry Page and Sergey Brin had named their company as “Googol” - a huge number (10100) but the Venture Capitalist misspell it to “Google”. Today, Google has become a synonym to “Search”. How delighted the founders would be to see their companies so popular!

Today’s Gyan is about another such company which is almost an equivalent for “To Courier”. Yes, it’s FedEx! (Funny, MS Word didn’t throw spell-check error for “Xeroxing” or for “FedEx”)

Born in 1944, Frederick Smith had innovative business ideas right in his genes. His father had started Dixie Greyhound Bus Line and the Toddle House chain of fast-food restaurants. Even, today the Greyhound buses are running across the cities in US and are very popular.

Fred got admitted in Yale University for his B.A. For his final year thesis on business idea, He wrote about a courier service having a Hub situated at say, Memphis where all the parcels from around the US would arrive first, would be sorted out according to their destinations and would be delivered overnight. In spite of the innovative concept, the professor wasn’t much enthused to see this as a practical Business idea and Fred got a “C.” Fred graduated in 1966 and joined the Marine Corps to serve in Vietnam. He fought with valor and received a “Purple Heart”. Even while serving in the Army till 1970, Fred hadn’t parted with his lifelong dream of founding the ultimate courier service.

So finally after quitting the Marine Corps, Frederick Smith founded Federal Express Inc. in 1971 – better known as FedEx. He managed to raise an initial capital of $ 70 millions. The USP for FedEx was the overnight delivery coast to coast. On the company’s first night of operations, its 389 employees and fleet of 14 small jets delivered 186 packages (“Half of which, I think, were actually sent by our own sales force,” according to Smith) In the first year itself, the company showed a loss of $ 27 Million. The year of 1975 had to dawn for the company to see some profit. But Lieutenant Fred knows how to fight and he fought…against all odds.

Slowly but surely, the company started growing. Of course, it wasn’t a cakewalk. Many a times, the cost of running the company would run so high that Fred would be left with no money to pay the salaries. All he had was a lot of passion and tenacity that inspired his fellow colleagues to work harder and harder…even without pay at times. During the oil crisis, company was in real dire straits. There was no money to buy the much needed oil to run the trucks…to fly the planes. Truck drivers sold their watches just to see the truck and the company running. What a commitment of the employees towards their job! All credit goes to Frederick for inspiring the employees to reach beyond the call of duty.

A story goes that, during the oil crisis, the company was on the brink of bankruptcy. Fred was on his way to Memphis to declare his bankruptcy…with everything almost lost. Waiting at the airport, for some reason, he caught the flight going towards Las Vegas instead of Memphis. There, he visited a casino and surprisingly, won a few thousands. He thought, “Well, not everything is lost yet!” This incident inspired him to spring back again. After returning to Memphis, he regrouped his people and resumed with his fight again.

Today, FedEx owns a staggering 600 jets, 40,000 trucks and has a headcount of 200,000. FedEx delivers almost three-quarters of a billion packages! It has also won a lot of accolades for its work like the first service company to win the Malcolm Baldrige National Quality Award (1990). Additionally, FedEx has consistently been ranked on FORTUNE Magazine's industry lists, including "World's Most Admired Companies" (No. 8, 2005), "America's Most Admired Companies" (No. 6, 2005), No. 1 on the Delivery Industry list (2005), and is on the "Hall of Fame" for claiming a spot on the "100 Best Companies to Work For" list since its inception (1998-2005).

From the operations point of view, FedEx Inc. comprises of FedEx Express, FedEx Ground, FedEx Freight, and FedEx Kinko's. It has pioneered the usage of high end technology to track the couriers and has made Memphis and Tennessee two big hubs of International import – exports. Almost 40% of the US Industry works on the “Just in Time” principle and it wouldn’t have been possible if it’s not for the “Overnight Delivery” by FedEx.

Frederick Smith himself has a personal fortune of $700 million dollars and serves on board of many companies. He is a self described “Forrest Gump” of our times. I wonder what would have happened if he would have believed his professor!

And today regardless of how you send a package or document overnight, most people say: “FedEx IT!!!” What an organization and what a leader!

Regards,
Abhishek