Biyernes, Mayo 25, 2012

What Jolito Ortizo Padilla says about Innovation

Four years ago, this mission was submitted to a strategic committee to one of the colleges in the Middle East where I was a mentor, but outright rejected. Now, thousand of universities and colleges refers to this insight.  

Innovation involves the creation of new knowledge. At the same time most innovations are new combinations of old insights. They come out of an interaction where people with different talents, interests, insights and experience get together in open communication and willing to share their knowledge with others.

Innovation processes that neglect the needs of users are inefficient. Science based innovations that are not supported by experience based learning are not successful. Therefore, innovations are best seen as outcomes of collected entrepreneurship. A generalized trust among people in working life contributes to innovation.

Science plays a growing role for innovation, but without experience based knowledge about production, markets and organization investment in science has little impact on economic performance. Innovation strategies and policies need to be broad. Firms need to combine research and development with building a learning organization that includes networking with external organizations. Public policy that aims at harnessing innovation for growth needs to combine science and technology policy with institutional change in education and labor market systems.

We are in a learning economy where success of people, organizations and countries reflects the capacity to learn. Old knowledge becomes less relevant as technologies change and global competition transforms working life, making some types of jobs disappear and others grow. Whatever knowledge you have, it does not constitute a lifelong guarantee of success for firms or for individuals. This is very important in the designs of education, in labor markets and for strategies of organizational trade and unions. All institutions need to focus on how to facilitate learning.

Biyernes, Mayo 18, 2012

Oil and Gas Sector in Troubled Water




Write a list of all industrial hazards you know and most, will be present in the oil and gas industry. From high pressures and flammable liquids to working at height, confined space entry and radiation, the list goes on. On land you can spread your plant out, take parts away for maintenance, repair or upgrade and get away from danger areas by truck ( or even running). More importantly, on land you can go home to a safe bed for the night.

In the oil and gas industry , a plant is packed into a smallest possible space with accommodation for up to 200 people placed in the middle of some of the world's harshest marine environments for 30 years. During a two week shift, employees work, rest and sleep on site and escape is by lifeboat or helicopter -you can't just run away from danger.

Repairs and upgrades are done in situ and take place continually. Nothing is the same to day as it was yesterday and change management enters the daily vocabulary. It may be something as obvious as a replacement part or a changed procedure or a less obvious change in some operating parameter. People make mistakes but the trick is to make sure that mistakes don't add up to disaster. This was clearly illustrated on July 6, 1988 hen a string of fairly incidents-none of which have been fatal on its own -led by the deaths of 167 people on the Piper Alpha platform.

You can's stop people making mistakes, nor can you design an installation that is foolproof. You can to manage people and manage change. Some people still believe that documenting procedures down to the smallest detail will keep everything safe, but who routinely reads the instruction manual or procedure in detail when doing a job? Management systems have to identify and manage risks, recognize weaknesses and, most importantly, work with people.

ISO and multinational businesses can see benefits that can be gained from the adoption of global standards and systems but people aren't the same the world over. You can see different cultures at different businesses in the same town, so why do we expect the same culture in different countries?

The TV series Oil Riggers may have been a compulsive viewing for some and perhaps it portrayed real life on a Texan land rig , but it bore little relation to work in the North Sea. Offshore drilling is certainly hard work and dangerous, but risk is managed not challenged. We may never really really know what happened on the Deepwater Horizon on 20 April-the inevitable legal battles will ensure that- but it has stated that it was not a result of a single failure.

So how do you audit health, safety and the environment in the oil and gas sector? What makes HSE different from quality? To answer the second question first, not a lot. Quality is a word notably absent from many oil company discussions. Instead the frequently used term is "integrity management". That tends to put the in-house focus on HSE and competence , with quality relegated to a supplier and subcontractor issue. But any quality failing on their part will lead to an increased HSE risk for the oil company as BP is now discovering.

Audit don't pick up every deficiency in a system and any belief or attempt to achieve that is doomed to failure. Far more important is to identify the culture in the company and the drivers : do they fit with the customer's own? Will the customer and supplier be able to communicate clearly with each other? Do they understand each other needs? As everyone involved in the Deepwater Horizon disaster will discover , whether you are based at land or sea, taking cultural differences onto account can be key.


Biyernes, Mayo 11, 2012

What Jolito Ortizo Padilla say about "Flexibility" and the Dow Jones Sustainability Indexes..

On the News:
Adidas, BMW and Unilever are among the best performing sustainable companies in the world, according to 2011 Dow Jones Sustainability Index. Launched in 1999, the indexes tracked the financial performance of leading sustainability-driven companies worldwide.

The World Index analyses the largest 2,500 companies in the world, assessing them against long term economic, environmental and social criteria and lists the top 10%. The research includes evaluating each corporation's approach to climate change strategies, energy consumption, risk management and supply chain standards.

This year saw 33 companies deleted from the indexes and new additions that included Coca-Cola and Samsung Electrics.

The organizations listed are broken down into 19 "super sectors" and the top company for each was also announced. BMW topped the automotive sector and Unilever led the food and beverage sector for the 12th year in a row.

 A new index analysing the top 40 companies in Japan was launched this year, just weeks before the Japanese prime minister vowed to lower carbon dioxide emissions to 25% below the levels of 1990 by 2020.


In a business context, flexibility can refer to a number of different ideas. Today its most common usage is in the workplace where it refers to such things as flexi-time. But the word has a longer pedigree in the area of strategy, where it generally refer to a firm's ability to respond to changes in its environment rapidly and at low cost. in the (limited) sense that strategy is an unchanging commitment to something, it is the antithesis of flexibility.

A firm's strategic  flexibility depends partly on its liquidity, since its ability to respond speedily is inevitably determined by access to funds. More importantly, it depends on its organizational structure, on the way in which its units work with each other, and the freedom hey have to take decisions.

The trade off between flexibility and firmness has been a long running subject of management discussion. GA Business and Management Consultancy wrote" For a company to succeed over a long term it needs to master both adaptability and alignment-an attribute that is sometimes referred to a ambidexterity".

For adaptability, read flexibility, and for alignment, read firmness. The balance between he two, ambidexterity, is a term was used in this sense in 1976.

Sumatra Ghosal put the dilemma slightly differently, writing: "One of the most fundamental and enduring tensions in all but very small companies is between sub-unit autonomy and empowerment on the one hand, and overall organizational integration and cohesion on the other hand."

For most of the past century, firmness has had the upper in corporate strategy. Companies have set themselves on a particular course and it has taken a huge effort to divert them. A big company, wrote one author "is a bit like an oil tanker. There is no way it can turn on a fills".


Biyernes, Mayo 4, 2012

What jolito Ortizo Padilla says about Strategic Alliance

A strategic alliance is a relationship between two or more organizations that falls somewhere between the extremes of an arms-lenght sourcing arrangement on the one hand and a full blown acquisition on the other.

In general, there are two types of strategic alliance:a bilateral alliance (between two organizations) and a network alliance ( between several organizations). They have many advantages:they require little immediate financial commitment,they get soaked and they offer a quiet retreat should a venture not work out as the partners had hoped.However,going into something knowing that it is (literally) not a big deal, and that there is a face saving exit route , may not be the best way to make those charged with running it hungry for success.

The most popular use for alliances is a means to try out a foreign market.Not surprisingly there are more alliances in Europe and Asia (where there are more foreign markets nearby) than in the US. In some cases, alliances are used by companies because other means of entering a market are closed to them.

One thing crucial to a successful alliance is a degree of cultural compatibility. Companies are advised for example, to pick on someone their own size. Alliances between very big organizations and very small ones are hard  to operate not least because of the different significance that the alliance assumes in each organization's scale things

Strategic alliances grew at a phenomenal rate during the 1990s.Some companies such as General Electric set up several hundred. But aliances have not always been successful. In 1998 BT and AT@T agreed to bundle their international assets into a single joint venture that started off with annual revenue of 11bn dollars, annual operating profits of 1bn dollars and some 5,000 employees. In 2001 the two companies agreed to unwind the alliance-at considerable cost.