A little fun to start your weekend …

From a land where the image is the message. Or where the power of fluff becomes real. LOL!


Earlier this week I had the pleasure of attending the Fall Convention of the Adhesive and Sealant Council (ASC) in beautiful Greenville, South Carolina. I was on their docket to talk about the consumer packaged goods industry (CPG) and we had quite a good conversation.

ASC members, like all suppliers to this industry, need to understand and navigate the not insignificant challenges facing their CPG customers.  Let’s talk about a few of those challenges here.

The first and perhaps most daunting challenge facing CPG is their own success. The question is:  Is it possible to be too rich?

Every major CPG executive goes to work with an albatross hanging over his or her head. That albatross is a stock price and profit structure that require incredible and unrealistic results to sustain. The chart above lays out the problem.

On average, CPG companies put more than 20 cents of every dollar of sales into their pockets as cash. Wall Street loves this profit structure but values CPG stocks based on totally unrealistic growth expectations.

CPG’s most profitable markets  -North America, Europe and Japan- aren’t growing anywhere near the rates needed to justify current stock prices. In fact many big product categories in these markets are flat or declining.

Meanwhile, the attractive growth coming in developing countries actually puts a drag on CPG earnings because that growth comes with significantly lower profit margins. While developing countries are rapidly minting new middle class families -CPG’s prime prospect- these markets lack the infrastructure, distribution systems and optimized supply chains that account for CPG’s current profitability.

This creates a difficult and unhealthy dynamic. ROI on expansionary investments -new plants and equipment, new subsidiary operations, brand development, etc.- is less attractive than cost cutting or stock repurchases. And juicing growth in home markets could require expensive and dilutive price and marketing battles that CPG players have, up to this point, largely avoided.

Simply put, CPG’s fuel mixture is too rich to power their best potential growth vehicles.


Here is a fascinating essay by Isaac Asimov authored back in the 1950’s as part of some consulting on a government funded research project. Assimov’s thoughts on where ideas come from, how to spur creativity, and the right team size and location to conduct brainstorming are very revealing. Fundamentally, Asimov describes the process as making connections between new facts and experiences with older ideas and insights … what he terms “the ability to make cross-connections.”

Undoubtedly in the first half of the 19th century, a great many naturalists had studied the manner in which species were differentiated among themselves. A great many people had read Malthus. Perhaps some both studied species and read Malthus. But what you needed was someone who studied species, read Malthus, and had the ability to make a cross-connection.

That is the crucial point that is the rare characteristic that must be found. Once the cross-connection is made, it becomes obvious. Thomas H. Huxley is supposed to have exclaimed after reading On the Origin of Species, “How stupid of me not to have thought of this.”

But why didn’t he think of it? The history of human thought would make it seem that there is difficulty in thinking of an idea even when all the facts are on the table. Making the cross-connection requires a certain daring. It must, for any cross-connection that does not require daring is performed at once by many and develops not as a “new idea,” but as a mere “corollary of an old idea.”

As they say, read the whole thing.


Building from my post about intelligence being a well-informed “opinion”, this item in the Wall Street Journal last week reminded me of another story of good intelligence informing smart decisions…highly opinionated intelligence, I might add!

The crux of the story is no amount of wishful thinking changes the laws of thermodynamics.

We are often told that the “promise” of the new age will be storing energy. Well, this promise isn’t new. In fact, it is very old.

Volta invented the first battery around 1800, and it is believed Persians may have had batteries in the early centuries AD (the “Baghdad Battery”). Unlike our ability to manipulate silica to double computing capacity every 18 months, advances in battery technology are SLOW moving.

Which brings us to our story.

Not long after Procter & Gamble purchased Gillette in 2005, my technical competitive intelligence team was asked to look into a potential investment the company was considering in a firm called A123 Systems.

A123 was a spin-out from the Massachussetts Institute of Technology (MIT) that claimed to have a breakthrough in lithium iron phosphate battery technology that could revolutionize electric cars.

The Duracell brand, which had only a weak position in the lithium ion space, saw big potential: Get in on the ground floor of the mass production of “good & cheap” electric car batteries and stick the Duracell brand on them. Tie the brand to environmental friendliness and innovation. Be a key part of the electric automobile future. Management appetites were whetted, to say the least. Plus, A123’s technology came out of MIT, so it must be great, right?

A certain consulting firm was hired to vet A123 and they pronounced the plan to be good.

Luckily, an old gray hair P&G engineer sent the package to my team to have a look.

We came to a very different conclusion. Our “opinion” was that A123 was mostly promises and not much property.

First, the “technology” A123 promised didn’t diverge far from existing lithium ion processes. Its promise of industrial scalability, uniform quality and long life didn’t seem very convincing.

We determined this by looking at lithium ion battery intellectual property (i.e., patents).  The consultants hired to do due diligence looked only at US intellectual property. They did not look at the massive record emanating from Japan.

Japan was the pioneer and leader in lithium ion technologies. The Japanese IP record was rich and included many “inventions” that led to commercial dead ends, most especially in the area of fabricating large, stable power cells. These lines of development in the Japanese IP record were exactly the same pathways A123 intended to pursue if they could find a deep pocket investor.

Further, we asked the strategic question: If the promise of A123’s technology was so convincing, why were they coming to P&G? Wouldn’t a firm in the automobile industry or in power and controls be a more logical and enthusiastic audience?

We presented our findings to key finance and R&D leaders. Needless to say, we were not very popular. In fact, we were surprised by much of the vehement blow-back from executives in the battery business. It was angry and accusatory … potentially career impacting.

People trusted A123 because of their legacy and position. They wanted to believe that very smart technologists given enough resources could coax a rapid breakthrough into existence.

We stuck to our opinion. Our assessment was fact based, and historically and intellectually sound.

Management listened. They compared our analysis to the opinion of internal advocates and the third party due diligence effort. We won on the merits and P&G avoided making a huge financial mistake.

Years later, of course, A123 Systems filed for bankruptcy after they attempted to scale up manufacturing for Detroit.

They were purchased out of bankruptcy and have indeed created novel and interesting batteries for automotive and industrial applications. The power quality produced by the A123 process is impressive. But the promise of scaled up, mass produced “good & cheap” electric car batteries continues to be elusive. (We’ll have to wait and see if Elon Musk can deliver on the promise.)

In business, well informed opinions -what we call “intelligence”- need to drive decision making. Wishful thinking and conventional wisdom, not so much!

Check out this video of a Red Tail Hawk taking out a drone. Old answer to a new problem … Falconry, anyone?

I can remember way back in ancient history when I got a 64 count box of Crayola Crayons … the box even had a sharpener incorporated into the package. How could it have gotten any better than that? Well, now look how far they’ve come. Pretty cool! And check out Data Pointed … many cool visualizations of data.

crayola chart


Our friend, Ben Gilad, has a great post up on LinkedIn Pulse about the difference between data, information and intelligence. He uses this week’s story about H-P’s pending split-up to illustrate:

Take the case of the failed merger talks between HP and EMC. Assume you are a competitor (or a customer, or a potential partner, or a start-up looking to be bought, etc., etc.). The information about HP/EMC is all over the place but it means virtually nothing. If in your company, all you get is information, it means you have no intelligence capability.

Data (not fully verified): The talks lasted for about a year, and failed. Some speculated they failed because both Tucci (EMC’s boss) and Whitman (HP’s boss) feared shareholders will reject the proposal (which would have forced Whitman to leave? Tucci is retiring anyway).

Information (verified): After the failure of its talks with EMC, HP announces it is splitting itself up into a Printer/PC and an Enterprise divisions.

Competitive intelligence (specific perspective on “facts” and information): This is not a strategic move at all, it’s a financial move. Who cares (except for the financial markets)? What would the two separate divisions do differently than what they have done before?

OK, you get it.  But you’re thinking:  Isn’t this “intelligence” example just opinion?

Of course it is!

It is informed opinion that gathers together facts, experience and knowledge and provides an “accurate” assessment of the situation. It is not the hip shooting, unicorn conjuring kind of opinion. It is reality based.

Somehow in our fascination with data and information we have banished “opinion” to the dunce corner. We forget that data and information are inanimate … they just sit there. It is opinion that gets things done. It makes sense of the facts and points to a course of action.

Intelligence is the process of creating well informed, data based opinions. No decent business leader, investor or entrepreneur can operate without these “opinions.”

When Steve Jobs looked at the emerging electronic music market in the late 90’s and said “this sucks,” it was his opinion. It was a well informed opinion that changed the world!

One would have thought that “Political Correctness” would have stopped at the shop doors of the CDC and other healthcare operations like Dallas Presbyterian Hospital. But one would have thought wrong!

In our 21st Century compartmentalized brains we seem to regret … even resent … the fact that honesty and competency are closely linked ideas. It is very hard to do the right thing or to do things well when you have to submit yourself to the tortured mechanisms of the “public relations” apparatus. When you have to avoid “truthy” language so as not to offend people, pretty soon, you forget the truth.

The truth about Ebola … or any fill-in-blank contagion … is you have to contain it to kill it. Look up the word “Quarantine.” As in: “Yes, so sorry you’ll have to miss your Monrovia relatives at the holidays, but Liberia is under Quarantine.”

The OMG moments in this dog and pony operation regarding Ebola are mind numbing. If you haven’t already seen the clip below, here we have Sanjay Gupta, not one known for donning tin-foil hats, having to operate in the land of unreality, interviewing the director of the CDC. It is a pitiful display:

When will we come to our senses? Please pray these clowns aren’t as incompetent as they appear!



Well, sadly another poor season for the home team (the Reds). But luckily we have other affiliations.

My brother, who grew up on the Cincinnati Reds, seeing all the greats of the 60’s and watching the emergence of Sparky Anderson’s “machine” in the 70’s, is now a committed St. Louis Cardinals fan. My young son is excited for the Cardinals, because they a “Meemaw’s team” … she lives in St. Louis.

So how could the Wall Street Journal list the Cardinals as “the most loathsome team in Baseball”? Sounds like sour apples.

Well, today, the mayor of St. Louis, Francis Slay, responds. Link is here. But here’s the payoff pitch, and it’s a good one!

…I feel compelled to deliver a simple message to America: We’re sorry.

Sure, we’re sorry the Cardinals have won 11 World Series championships, two since 2006. But there’s much, much more for which we owe all of you a heartfelt apology.

Indeed, we’re sorry that New York and San Francisco are 2.3 times and 1.7 times respectively more expensive to live in than the St. Louis metro area.

We’re sorry for producing one of the world’s best-selling batteries (Energizer) and two of the 10 best-selling beers in the world—Budweiser and Bud Light.

We’re sorry that the four largest metro areas in the nation lost nearly 25,000 financial-service jobs between January 2007 and September 2012, while St. Louis added more than 5,500 in the sector.

That guy Jon Hamm? Yeah, we’re sorry for raising him here and sending him out into the world for your entertainment delight.

We’re sorry for our diverse community in that more Bosnians—over 60,000—call St. Louis home than anywhere outside of Bosnia.

We’re sorry for Forest Park, our beautiful 1,300-acre urban park comprises an award-winning zoo, science center, art and history museums, golf courses, ice rink and green space.

We’re sorry for not only being home to 18 Fortune 1000 companies, but for developing one of the most promising and fastest-growing ecosystems for startups and entrepreneurs, delivering innovations that are being used by businesses and consumers world-wide. You know, like that pesky social-media platform Twitter (St. Louisan Jack Dorsey ) or credit-card processing device Square (St. Louisan Jim McKelvey).

We’re sorry that at the 1904 World’s Fair in St. Louis, Richard Blechynden served tea with ice, thus inventing iced tea (although not the rapper/actor Ice-T).

We are, in fact, actually kind of sorry that our state animal is the mule, but that’s another discussion for another day. The point is that we here in the Midwest are not a boastful people. We’re humble and quietly go about our business, inventing the things you use every day, entertaining you, finding employment for your citizens and handing you losses on the baseball field regularly. (We’re especially sorry to Chicago.)

Don’t hate us because we’re beautiful here in St. Louis. But if you do, just know that we’re sorry. Go Cards!

tskNow for something completely off topic.

So many issues in the public zeitgeist are mind-numbingly silly or stupid. The hullabaloo over campus sexual assault is just such an issue. But leave it to Camille Paglia to set the mind straight on this topic.

I commend to you: The Modern Campus Cannot Comprehend Evil

What a strange age we live in when a lesbian art critic does a better job framing “the talk” that every father should have with his teenage daughters, especially those headed out to college and the wider world.

Paglia is about the sharpest mind and sharpest commentator on the public scene out there. I wish more people steeped in conventional wisdom would take a hit off the stiff coffee she brews up. And I wish Paglia would write more.