Earth Hour Post - TCO Models for Sustainability

One of the controversial environmental topics I like to bring up is solar power. While naive (but well meaning) environmentalists support solar technology (for mass consumption in it's current state), they don't realize that more energy (in the form of oil) is consumed to create a solar panel than will ever be extracted from it.

Also, many "environmentally" friendly models are simply offsets of other more polluting or less sustainable practices.

As a corollary of my previous post on this topic, as with any strategic endeavour that wishes to succeed (not just on moral grounds but also on more pragmatic and physical terms), I believe it is necessary to take a more all encompassing total cost of ownership (TCO) approach. That is to say that non-sustainable processes cannot be "green washed" by offsetting the true environmental costs (with striking similarly to NIMBY).

Case in point, solar panels may be "green" with no emissions where they are installed, but they are tremendously inefficient for their purpose. NASA puts solar panels on it's space craft because it can provide a light weight, steady stream of power with the majority of its complexity and drawbacks offset off the actual device and doesn't need a complicated external fueling source (such as gasoline with atmosphere or batteries).

In deciding if something is environmentally friendly (through and through), a more cradle to grave to cradle approach is needed which encompasses the many definitions of sustainability. There are even some European counties leading in policy innovation in these areas (yes, this article was written in 2001, and we wouldn't *DREAM* of implementing something so bold here in North America).

Also, in awareness for Earth hour, I'm putting this post up as my last activity before I shut down all electronic devices I have for an hour between 8:30 PM and 9:30 PM.

Aside: Note, that "Earth Hour" is actually in Ontario's off peak hour (and by extension, most people's similar behaviour pattern) for energy consumption so we are actually saving the least amount of power possible in an hour. For Earth Hour to have maximum potential (and exposure), it probably would have been best to execute this hour during peak hours aka (7 to 11am or 5 to 8pm on a Winter weekday or 11am to 5 pm Summer weekday).

Zimbabwe Defeats Hyperinflation

The Globe and Mail wrote an article on How Zimbabwe slew the dragon of hyperinflation and it warrants looking at some of the key features of this story.

When a country's currency is in trouble (hyper-inflation) most traditional fiscal and monetary policy remedies won't work. There are several rather extreme options to deal with the problem:

• Issuing a new currency
• Adopting foreign currency

Now in either of these cases, you are forced to abandon your previous currency (obviously). However, issuing your own new currency tends not to help in the case of Zimbabwe as it is implied that they would have run into the same problems again. Following this option would have required an overhaul of the financial system there along with the replacement of key government officials and policies to instill confidence in the new currency (you can't just label a lemon an orange and try to sell it again).

However, that method is slow as it requires the people who hold the new currency to have faith in the government that controls it. Instead, Zimbabwe opted to switch to foreign currencies: US dollar, South African rand and Botswana pula. What's the downside of this option? No control on monetary policy (which works as both a plus and minus). This means that the government has no control over the currency (which for some people is a good thing in this case).

Loss of a currency is a serious issue. For instance, I would be interested in seeing what a Zimbabwe "federal budget" would look like.

Also, on the ground level, there isn't much "change" as the article states, as shop keepers don't have enough to coins and small denominations to make change and they will issue notes or ask customers to take change in the form of candies or small trinket products. This is indicative of the hiccups in the money flow and must have a negative effect on the velocity of money (and GDP).

Although this is a major step in trying to set things right, there is plenty more work to be done.

Petro Can and Suncor - Why Can't Canadian's Compete?

The latest "exception" might be this financial crisis, in which case our banks simply weren't "beat up as badly". I'd call that winning the race for last.

However, Canadian consumer products businesses always seem to be small shadow's of their American cousins. Examples?

• Jumbo Video versus BlockBuster
• Mr. Sub versus Subway
• Petro Canada (Sunoco) versus ESSO (Exxon Mobile) - Check out my post on the Petro Canada / Sunoco merger posted yesterday

Aside: I might also note that American readers probably look at the above list and have no idea what I'm talking about. The American businesses have crossed the border, but many of the Canadian ones have limited success (or have closed down) on our side of the border only.

Even Tim Horton's (founded out of Hamilton by the famous hockey player of the same name) was purchased by Wendy's a while back.

Now granted, there are some obvious general assumptions which apply which make it harder for us to "compete" on a comparable level playing field:

• The US has a 10x larger population than Canada, generally more demand
  
• Canada is geographically much bigger which results in a compound effect and lower population density
• We typically have higher tax, but enjoy more social programs
• American's have higher marginal propensity to consume (MPC) improving their GDP multiplier and demand curves

I sincerely think that this is a "handicap" of our own making. While Canadian business would rather keep prices stable and sell a constant volume (as was described to me by the owner of an export company), American's are willing to drop their margins to get the higher volume. Simply put? American businesses are more willing to push competition.

Note as well that it's not that the American's are targeting us per-say when they make an expansion onto our soil, but rather they are embracing globalization. Generally, the companies listed above have a presence in other countries as well as Canada.

Particularly in the Petro Canada / Suncor example, it's clear who's the bigger player as they will be retaining the Suncor name and CEO.

Superstructures in Social Networks

"We can save memory by storing the year as two digits instead of four" ~80's programmer
"640K ought to be enough [memory] for anyone" ~ Bill Gates, 1981

You always have to think of the consequences of your design...
Or, as one of my favourite webcomics, xkcd, puts it:

The most recent reincarnation of the limits of software design has surfaced was Facebook's notorious 5000 friend limit. This is well above Dunbar's number (~150), a proposed theoretical natural limit to the number of useful social connections we can have.

Now I'm sure a Facebook software designer would argue (rightly) that having 5000 friends is probably some form of inappropriate use of Facebook (if not outright abuse), but it turns out that is exactly what happened when popular web personalities tried to use Facebook as a tool to connect with their readership. With sky rocking success, suddenly Facebook's 5000 friend limit was a lot closer than people originally thought. Although most intentions were good (to keep closer contact with their fan bases) it turns out their success was too much for the Facebook frame work.

Certainly, most of us who imagined internet fame didn't conceive of this type of double edged sword.

I was recently speaking with a colleague who is a lead software developer for a popular Facebook application who was describing the processing inefficiencies that managers don't seem to understand when they design systems. Recopying entire databases, poor message protocols etc. Even with the most efficient code, there was that nasty problem of becoming 'popular', and suddenly experiencing exponential network growth. In a system like Facebook, where connections are always 'two-way', it exacerbates the problem.

What does that mean exactly? Unlike Twitter, where connections are generally one way (I follow you, but you don't HAVE to follow me), Facebook connections are all bidirectional - There is one connection shared between us. However, Twitter, each connection is one way and as such, you can have one popular node (such as a Barack Obama) with many connections in without as many connections out. What does this translate into?

I can follow Barack, but I'm pretty sure he doesn't care too much to follow me.

This simple assumption dramatically cuts down on the memory, processing and bandwidth requirements needed to provide the same level of basic service. But even, if the technology will permit it, are our minds too "primitive" to keep up? Or is it just physically impossible to reply and stay current at that volume on such an intimate level (versus the traditional mass communication channel models)?

I'm quite surprised that Facebook servers don't burst into flame each time someone logs into their website. At the time of writing, my Facebook boasts exactly 450 friends. From what I can see on my friends connections, this is hardly staggering. If you asked me to design a search algorithm that identified the latest activity of 450 people and then sorted them in order of time and relevance on my homepage in real time (a few seconds loading and transmission delay), I might have a heart attack (or a very large consulting contract). However, it becomes very clear (especially with their previous incarnation of "More / Less stories about..." design) that there is an inherent (unstated) hierarchy of friends. I would almost expect it to be a sort of "page rank of friends" that helps Facebook efficiently sort interesting stories for you.

Why I love YPBlogs

Salience:

Readers may have noticed that I've recently subscribed to various Blog directories in a narcissistic attempt to drive more traffic to my website, boost my page rank and generally solicit more feedback on my postings. I wanted to create a bigger audience for my material beyond my own networks in Facebook and Linkedin.

Causailty:

Anyone who designs or uses webpages will be familiar with Google's pagerank formula, and therefore if you are looking for an effective method of boosting your rank, you need to incorporate that into how you seek links to build your organic ranking. However, there are more metrics for success on the web. For instance, the number of hits, comments and the "quality" of said metrics. Keeping these goals in mind, I've been evaluating some of the tools I use to promote traffic to my website, particularly focusing on blog directories using a framework which cointains these elements and their relationships.

Architechture:

Among these blog category services, my favourite would have to be YPBlogs (Young Professional Blogs). The reason? I get good quality hits from the site is the short answer. But it's because of the subtle differences in how the site is structured (to match my goals). Let's look at the details:

• By virtue of the site's writers / target audience, it attracts a certain crowd - energetic, exuberant, intelligent and technology proficient young professionals
• You are listed on the front homepage - Unlike some of the other categories where you are listed on the 97th page among 50 other blogs on that page alone
• They enjoy a decent page rank
• It's a free service
• They aggregate most recent blog posts on their homepage making it easier for you to immediately hit the latest news (and conversely for people to hit your recent posts)
• They have dynamic content which refreshes *constantly* attracting people to return often
  
• Bottom line - You get good hits and comments - I have two blogs posted on their service and I swear that my traffic has doubled (Ok. Maybe my blogs are relatively new, and "doubled" isn't really that impressive, but it is certainly way more traffic than I'm getting from the other services - a more "apples to apples" comparison).

Resolution:

I think the most interesting point here though isn't what YPblogs has been able to do for my Blog, but rather, what it's been able to do for my blog reading habit. I've found it surprisingly difficult to find interesting blogs to read (that aren't major publications by writers who blog as a full time job). What I was looking for was independent blogs of individuals who simply wanted to express themselves or ideas and this was a great place to find material.

In the interest of full disclosure, I'm hoping to become a featured site on YPBlogs by writing this post, however, the outcome of that is uncertain as this is a post they have not solicited and I would have (or rather, have just) written anyways.

Smart People Saying Stupid Things

Remember Senator Ted Stevens' comments about the internet being a series of "tubes" rather than a "dump truck"? His description of the internet was so flawed (or rather poorly described) he got heckled by the Daily Show and it resulted in the spawning of (and his self immortalization through) his own personal internet meme.

The unfortunate thing is if you dissect what he was saying (between his pauses and stuttering), he was actually trying to describe the difference in message flows between Stacks (dump trucks) and Queues (tubes) and why net neutrality is important for internet traffic. How unfortunate. I pictured in my minds eye, some techno-consultant who shook his head at his message being butchered while silently crying that he would probably be blamed for this later.

As tragic (or humourous depending on your perspective) as you find this story, a good lesson here is the dilution of any message by the messenger. One of the biggest issues facing organizations is that for each additional management layer you create, the message usually loses about 20% fidelity while passing between layers (or retains 80%). So after two layers you're down to 64%. After three layers 51% and so on. Think of the childhood game of broken telephone. Or this Dilbert Comic from Scott Adams:



There are some obvious solutions. Jack Welch is a strong advocate of flat management for this very reason. The idea that being flat and having a minimal number of reporting structures makes your organization literally (and ideologically) more tightly knit and flexible.

Another is a very well organized communication plan. Messages should be unified and repeated. Changes should be well managed, but not so drastic that they violate or become misaligned with your core values. In an ideal scenario, people should almost be preemptively able to anticipate your communication. There should be few "surprises" which usually lead to things being taken out of context which further obfuscates the truth. A good example of this is technology companies and the "planned obsolescence" of consumer products.

This problem gets further compounded and exacerbated if:

• You are in a MNC - Your audience speaks different languages and struggles with understanding idioms, slang or cultural customs.
  
• Globalization - Issues related to distance in transmitting messages or updates.
  
• Lack of standards or a common lexicon - Changes in context from one department to another lead to gross misunderstandings.
• Decision cycles - Propagation of time delays from when a message was fresh to the latency after it is released for public consumption including the iterative refining process before it is approved.
• Message volatility - Chaos. Too much communication and too much changing at once. No "version control" on ideas.
• Weak culture - Unclear vision or mission in the company's core values or over arching goals causes people to constantly second guess the organization's direction and their role in it.
  

In professional (and personal) relationships, a top complaint many people have is that communication is poor leading to unnecessary misunderstandings. By identifying the most recurring issues facing your organization's communication channels you can reach the low hanging fruit: preemptively get the most out of your resources with a minimal effort.

Developing Your Personal Brand

We've often heard horror stories of people who've been burned because of a blog post, Facebook photo or Youtube video of them doing something embarrassing, it being discovered by their boss and them getting canned over it.

People should realize by now that their online presence in the public domain can be detrimental if left un-managed. However, the other side of the coin is that a well managed online identity can bolster your image, especially as a recruitment tool.

While most applications for jobs and competitive opportunities limit your application materials (2 page resume / CV, cover letter, essays, etc) it is beneficial to have a strong online presence to supplement your materials. Without the restrictions of a standard application package for example, including a website can stretch the valuable time a recruiter looks at "You" (your personal brand identity) from the standard 30 seconds before you are placed in the "blue bin" filing system to maybe that extra few moments in which they decide you're interesting enough to call in for an interview.

Some particularly good examples? Check out Jamie Varon's twittershouldhireme.com which only started on March 9, 2009. Although she's placed all her eggs in one basket so to speak, she's already got a fairly large following (she explains on an online interview that she was one of the top followed uh... twitter-ers).

In her example, she had a unique and bold idea, great execution and strong social networking / advertising. Her story is in it's interim stage as she is being called in for an interview by Twitter, but her fan base has its fingers crossed for good news.

Twitter, Facebook and Software Modularity

I've just recently added Twitter to my account after receiving numerous invitations from friends and colleagues and after watching several episodes of The Daily Show with Jon Stewart, figured I shouldn't allow the technological gap between myself and US Senator's get extended too far.

I've also added the Twitter app to update Facebook status as well as Twitterberry, an application to update Twitter through your BlackBerry. It occurs to me how much layering is now involved in social networking.
When I update my Twitterberry application, it updates my Twitter account which in turn updates my Twitter application on Facebook which updates my Facebook status. All this in less time than it takes for my Firefox browser to refresh my Facebook homepage.

This is a testament to modular software design. However, as seamless as this progression appears to be, the recent updating of Facebook's "faceplate" for lack of a better word, brings up an interesting question when it comes to systems design.

Facebook was previously divided into several categories of communication: Status Updates, Messages, Wall Posts and (more recently) Comments. However, this new design begins to blur some lines (particularly between Wall Posts and Status Updates. While users may remember Status Updates as preceding with "is", Facebook has quietly removed the "is" as the default precursor to your activity update and slowly blended it such that status updates appear simply to be posts on your own wall. Similarly for sharing Notes or Links.

Now, this has some users up in arms based on the user interface and online "form factor", but in looking at my old Facebook for BlackBerry app ("old" by the online versions new standards, but still the "latest version") I noticed that much of the context that made sense in the previous versions now don't make much sense at all. It's a wonder that the API still works as well as it does (legacy code probably not yet depreciated) however, it's only a matter of time before this application gets a major overhaul.

Software vendors and developers need to catch up with Web 2.0 (it's hardly "new" anymore as it's been around for years now) and understand that in the development life cycle, there are major issues associated with changing form factors and even templates when your services are so integrated and intertwined with other services.

Modularity was a nice to have when your software was standalone and you simply wanted the ability to cheaply and quickly roll out new releases of software and be flexible with passing your code from one developer to another for outsourcing purposes, however now with the interdependency of message protocols and databases, it has become a critical necessity.

Especially as enterprise customers begin to rely on social networking technologies such as Twitter and Facebook as part of their mobility strategy, software design for increasingly critical applications must be more robust.

Differentiation - A Necessary Ingredient in the Recipe for Success

I've always been a big advocate of differentiation. Both as a principle for individuals and organizations. Differentiation answers the question: "Why should we pick you?" and is a lead in for all the important questions and actions that follow. What key characteristics is it that makes "you" worth the attention of your audience? What qualities of your products or services makes them interesting or noteworthy? Why should we pick you?

Many business leaders subscribe to the idea that competition brings out our best performance. Some will even go as far as competitively ranking (by percentile) and categorizing employees. The top 20% make the A group, the super stars. The next 70% are the B group, the vital work force engine. The final C group are "mismatched", and depending on the aggressiveness of the firm, may be reprimanded, retrained or might not be employed for much longer. While such aggressive behaviour is debated by both advocates and detractors of differentiation, people who are in sales roles will know the value of being aware of the dynamics (even if they choose not to participate). And sales roles doesn't just encompass building customer relationships to eventually lead to the consumption of your products or services, but also the sale of ideas to colleagues or projects to upper management etc.

In a world with shrinking resources, global competition in all markets and increasingly skilled workers, the ability to sort out and match requirements must keep pace with the needs of the organization or consumers (whether they are individuals or corporations).

's to 's

This is particularly notable in a weak economy, when many people make small realizations that "paper towels are just paper towels" and slowly start to adopt "inferior" (in the economic income elasticity sense of the word rather than quality) goods versus "normal" goods. Differentiation on brand alone isn't good enough any more. Now that people don't have the financial exuberance they previously had, corporations must work extra hard to pull out that extra couple of cents from the consumer's marginal propensity to consume.

Is Globalization and Outsourcing "The Devil"?

Often we hear cries that globalization and outsourcing are the demons of capitalism and create unfair playing fields for local business while oppressing the poor of foreign countries for the benefit of the rich. Unfortunately, often many activists have reason to complain.

Many altruistic people are comfortable drawing parallels between our lifestyle versus those of developing nations, akin to: "You should be happy with what you have compared to what poor people in other countries have." I would propose that responsibly exporting components of success that lead to a shared and similar lifestyle is the first step towards achieving that dream.

While good intentions are the motivations at the start of the journey, it is necessary to have the engine to drive you there which I propose is the idea of fair trade and responsible globalization.

I think that if you are aiming for the noble goal of global equity (as the aforementioned statement assumes) than you will have to rely on some degree of globalization to happen. And as with anything, a good idea can be poorly applied if the implementation is not well planned.

I do believe that globalization is inevitable (for better or worse). Furthermore, I perceive the inequities in terms of purchasing power and lifestyle as inherently unstable scenarios that free trade should theoretically begin to remedy. However, I can understand an activists concern at the potential (or rather, historical) of exploitation of poor foreign workers (or even "opportunistic disaster capitalists" as Naomi Klein describes them in her book Shock Doctrine) which subsequently also results in lost jobs in home countries. While the opposite strategy would be considered protectionist, this strategy certainly seems reckless, benefiting only a select few based on morally weaker ground and attracts negative attention.

The focus should not only be on exporting the engine of capitalism, but also the standards that come from more developed countries in terms of workers rights and democratic process that should go with it. This is to bring a more broader definition of success and prosperity into an economically (and potentially politically) less developed country.

Any company that attempts to outsource without taking these issues into consideration will certainly struggle as consumers and workers demand more corporate responsibility from their leadership and insist that company's stick to their stated core values.

Assuming a more optimistic tone, a corporation that is sensitive to these issues will not abandon globalization, but will rather do it in a more responsible fashion. The economic assumption from free market and supply side advocates is that a company opening a new factory in an area should be increasing the labour demand curve and as a result raise the wages of the local populace. While a rise in real wages is a great metric for describing success, what is more important for the population at large in this case is that the entrant companies are providing options for local workers.

That is to say, if current workers are unhappy with their working conditions in their current jobs, this new opening will need to provide them with incrementally better opportunities in order to attract them from their current positions or to fill a vacuum of unemployment. This is the opportunity that foreign companies can and should offer to locales where they open new operations.

For companies who are constantly looking for differentiation, this leads to the obvious marketing and PR component. In this day and age, it is simply not enough to do social good without having an open and frank discussion about it in public (in a closed loop communication system). Corporate communications should proclaim their messages of good faith coupled with their good deeds so that the public can transparently judge them based on their actions.

Facebook: Privacy and Broken Business Models

Facebook had originally started as an online community for University students unlike MySpace which was inherently considered more public domain. Only as recently as last year did Facebook start allowing the creation of "public profiles" which are now not much more improved than short summaries of friends lists.

Even recently, Facebook had to retract changes made to their ToS because of IP issues associated with the changes. As they look for creative ways to make money from their services, they have to come to terms with the initial strategy with which they were originally modeled.

Because of this initial definition of their space, they are having difficulty when it comes to leveraging their extensive network. Their network size is larger than MySpace, but their revenue is struggling to match their growth pattern.

Using an advertising model to make up most of their revenue, Facebook users will notice that their interface has become plagued with irrelevant ads (IQ tests, get rich quick schemes and all the garbage we hated on other parts of the net).

They should be leveraging their "intimate" knowledge of us for more targeted advertising. This has already started to appear in its infancy as a form of social advertising: Your friend, X, has joined the Y group or become a fan of Z product (with the implied suggestion that maybe you'd also be interested). There is potential here to do more direct communication with your fan bases in a similar vein as a membership or frequent purchasers program.

Also as differentiated products and brands can also be a form of self expression. Actively becoming a member or fan of such products on your social networking site become a natural extension of this expression. Marketing Mavens in the community can create a "celebrity endorsement" in their communities by proclaiming their interest in certain products by signing up for and participating in these fan memberships and groups.

These fan memberships and groups also provide focused and attentive groups for targeted communication. They are a captive audience eager to consumer your products but more importantly are interested in learning more about updates or possibly participating in feedback relating to these products.

This greatly affects current advertising models as well as how corporations solicit feedback and communicate with their loyal customer bases.

This may be good solution and business model to follow which allows Facebook to have it's privacy cake and eat it too. For now it seems like this type of model is rapidly gaining popularity as a nice to have, but could very quickly become a necessity for businesses who want to stay in close quarters range of their customers.

Sustainability and a Green Focus

The top issue with MBAs and other business leaders today is the idea of sustainability (Wikipedia article authored Jan 8, 2009) coupled with corporate responsibility. Although, MBAs are currently highlighting this area as important, it lacks a definition which is meaningful as actionable advice.

I would propose that the most base definition of sustainability should relate directly to energy capture and consumption. However, since products cannot simply be arbitraged nor modeled directly as energy consumption, there are many other aspects which must be considered: carbon emissions, land use, natural resource extraction rates etc.

It is quite obvious that anything which is consumed and not replaced is in an inherently unstable relationship. Currently, companies such as Monsanto are working "diligently" in order to increase the yields of products we consume (in Monsanto's case, GMO food products) as a solution to assuage the strain and diminishing return of our resources. However, even the most cynical and fastidious capitalists must recognize that there exists some natural limit of efficiency (even with technological augmentation).

Biotechnology growth has recently spiked up as a result and its now up to companies to find out what that means for them. How should companies incorporate business practices so that they can benefit from this inevitable trend. While some companies are contributing at the forefront with new innovations in resource management, other companies will have to find which services they can provide or will demand in the future. Whether these companies are innovating to create substitutes or trying to increase the efficiency of how we use our resources, sustainability management will likely become an increasingly popular (and necessary) field.

The Hiring Process

With the economic downturn, it has become more important than ever for companies to employ the best HR practices possible, whether they are looking to shed excess capacity (lay off workers) or use this opportunity to pick up top talent.

I don't think anything drives this point home more than a recent job fair I went to in Toronto where the line up went out the door and across the floor of a crowded convention hall to meet up with a hand full of employers, only a fraction of which were actually hiring. Although these employers can have their pick of the litter, it becomes very difficult to sort the wheat from the chaff.

The recruitment process, a process like any other, has many metrics which can be used to determine it's success rate. Recruitment and hiring can also be evaluated at different stages to understand the relative performance and contribution of each stage to the overall success of recruitment efforts. First let's take a high level look at the recruitment process:
Recruitment Events:

Although it would be perfect for recruiters to be able to attend all recruitment events with potential candidates, the reality of the situation is usually that there is a limited staff and budget. This in turn means that recruitment teams have to prioritize their attendance based on their recruitment goals and needs. Similar to a targeted marketing campaign, HR recruiters need to advertise to their perspective new hires to get them interested in applying. A valuable metric to evaluate for this stage is how many applicants applied and how did they find out about the posting. While job boards like Monster.com might have a swarm of applicants, the quality and relevance of each applicant might not be of the caliber or fit you are looking for.

Application Process:

The problem with recruitment today (especially in this climate of high unemployment) is that there is usually an insurmountable number of applicants. The application process needs to be able to navigate through the clutter, however, it also must be concerned with disguarding good candidates. Even the best tools in this area will appear as double edged swords. The application process is usually as follows:

1. Application materials are screened by an automated process (Resume / CV, cover letter, references, transcripts)
2. Recruiters pick out top candidates for a first round interview. In this interview, the recruiter does a pre-screen for fit within the company, behavioural interviews, and leadership / soft skills assessment etc.
3. If the candidate passes, they are then passed along for a second interview, usually with the hiring manager or colleagues for competencies and technical skill.
4. A subsequent interview may follow by a senior executive for long term potential within the company and final approval.

Many companies have referral programs which aim to quickly identify good quality candidates. These pre-existing relationships act as a pre-screen for candidates as current employees vouch for their ability to perform the roles. It has often been said that 80% of all jobs are found through networking. Some companies even provide an incentive for employees by offering a referral fee for candidates who are extended an offer.

At this stage, it is also important for companies to evaluate the process and individuals participating in what Jack Welch calls the Hiring Batting Average. It's essentially a review of the success of your company's recruitment team to ability to identify and hire star employees at each stage. Those who are proficient should continue to be involved (or escalate their involvement) while those who are less successful need to improve their "batting averages" or be taken out of the process.

Candidate Offers:

Hopefully, by this point there are few hiccups in hiring process. However, for highly skilled or demanded candidates, there may still be the need to negotiate terms, benefits and salaries. If you offer competitive salaries, you will not lose as many good candidates to other companies (and retain them for longer also). Looking at your compensation system and ensuring that it is aligned with your needs and value proposition as an employer of choice.

Hired!

By looking at all of these items independently and as a whole, companies can make the most of the resources they have in order to provide the most benefit for their operational teams. In an environment where more is being demanded with less, it is crutial for all members in a company to operate at their most efficient levels. Especially the component which is responsible for adding more memebers.

Local Coffee House Profit Conundrum

Introduction:

A local coffee house was looking at its books and noticed that it's profit margin for the last quarter were down. This was a seemingly large contradiction and interestingly confusing to the management, who decided to investigate further as growth had been fairly steady. In fact, their intuition told them that they had more customers these last few months than usual. Let's use the Rotman School's Integrative Thinking model to break down the problem.

Salience:

In breaking down the their profit model, they were certain that their cost model was the same: Despite the fact that there was more traffic coming to the store, they had not changed their hours or personnel per shift. Standard supply side items such as rent and food and beverage suppliers had not changed and there were not any large capital outlays for new equipment nor maintenance.

In investigating the revenue side of the profit function, very little had changed as well. The product prices had remained the same and volume had even gone up recently.

Causality:

However, upon inspecting the volumes of each types of products purchased, it became apparent to the management that there was less people dropping in for snacks. There was a steady strong demand for lunch products such as sandwiches, but a decline in the demand for coffee, a high margin product.

As a result there was also a shift in the peak periods from the 10 am to the noon hour, when a local university's students were let out of their morning classes for lunch.

Architecture:

To identify how to build a framework around the issue, the management team looked at the causes of the drop in profit margin and looked for opportunities and strategies to capitalize on this new dynamic.

By identifying this shift in consumer behaviour, there is an opportunity to better align their services with their new client base to serve them better.

Resolution:

Based on this demographic shift, there was a higher demand for their lunch products and potential to develop a more robust menu beyond the limited offering they were currently providing.

There also exists the possibility to shuffle the shifts to meet the change in demand from the shift in the clientele and to adjust their inventory sizes accordingly to minimize inventory carrying costs and spoilage.