Understand the process before starting to innovate - Warren Buffett to the rescue

My.ComMetrics.com
ComMetrics

Session 14: Warren Buffett to the rescue – analyse, decide...

http://www.slideshare.net/ComMetricsUniversity
Latest version can be found here just before class
Presented by

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social media trends 2011

ComMetrics blog checklist
Urs E. Gattiker , Ph.D.

2008_06_16

ComMetrics
_Example – Amazon – leverage your
process

#1 Expand into new business areas
Challenge

Strategy: Find business areas that benefit from core
competencies – logistics, etc.

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>Introduction _Purpose >How to >Decision >Conclusions >Tools & Tips

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process

Challenge


Solution: Allow others to sell on your platform

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process

Solution: Sell food like Coop or Migros online
http://commetrics.com/?p=9114

- 2 min video
http://www.youtube.com/watch?v=2BntYZ9sBgY (German)

-Amazon taking on Aldi, Lidl, Tesco and Migros besides Coop
What could be the problem
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ComMetrics
_3 Why it matters – today„s 3 nuggets

1 Why does Berkshire Hathaway„s shares trade at a discount?

2 Does Warren Buffett know something we do not?

3 Is continuous improvement important - how does creativity and
hard work help?

2011_01_19

_Introduction >Purpose >HowTo >Tools & Tips >Decision >Conclusions

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_Purpose

What is this all about?

2011_01_19

>Introduction _Purpose >HowTo >Tools & Tips >Decision >Conclusions

ComMetrics
_What about process management?

Definition in textbook?
Does the textbook define process management, process innovation,
etc.?
How are process innovation, project management, etc.
defined in other MBA courses/modules?

How does process management, investment, project management
and so forth relate to
innovation?

What is your company„s approach to process innovation and project
management?
(please bring document to class)
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>Introduction _Purpose >HowTo >Tools & Tips >Decision >Conclusions

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_From Purpose to HowTo

How do we put this into practice?

2011_01_19

>Introduction >Purpose _HowTo >Tools & Tips >Decision >Conclusions

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_Assigned readings – Topic 14

- we choose a student to moderate the discussion – you can
volunteer yourself for today or for tomorrow

- please have your notes ready – all students

- Chosen reading is:

- Baxter
2011_01_19


ComMetrics
_Look at the process with the
outsourcer - DHL

- offering too many products can be very costly

- Cutting too much will upset some consumers
- Lego = girls

- Manage partnerships with customers AND
suppliers requires trust .... Manage in
strategic and proactive way

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ComMetrics
_Look at the process, search
find and manage risks

- 1.5 liter plastic bottle weighs 63gr
- new bottle weights 48gr

- Get buy in for the issue
- Put the team together
- Overcome obstacles
- 14 months to discover the process
- introduce in market – Russia big enough but
not as bad as if things go wrong in BRD, US
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ComMetrics
_Do modern management techniquest improve
productivity?

http://www.ft.com/cms/s/2/d5933396-ed2b-11df-8cc9-00144feab49a.html

A field test with Accenture... and researchers - what a surprise this is!

Get draft paper 48 pages pdf:
http://www.stanford.edu/~nbloom/DMM.pdf

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_What does Warren Buffett do?

The oracle of Omaha – If I do not understand the process (e.g. 1999
during the Internet boom), I cannot invest in such a business

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http://www.cnbc.com/id/40198762

http://howto.commetrics.com/?p=152 (released Jan. 25, 2011)

Why does the stock market discount the value of Berkshire
Hathaway – and has so for years

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50-year maturity bonds – can we predict that far into
the future
Is this sound investment?

What is the margin of error here?

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Shareholder report
http://www.berkshirehathaway.com/letters/letters.html

He talked about independence of directors in 2002
already

==> if your income from directorships is too high....
e.g., 50% or higher, you are not a truly independent
director

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Reading Economist – Governance – Session 9 Infos we discussed:

- “...our findings cast doubt on whether regulatory changes that
increase shareholder activism and monitoring by outside directors will
be effective in reducing the consequences of future economic crises.“

- Corporate insiders want to protect their jobs (hide the bad news)
while “... independent directors have an incentive to avoid the
reputational cost of a bankruptcy by pressuring firms to raise equity
capital.” (raise equity in markets).

==> so if they sit on too many boards, they become too dependent on
that income --- according to Buffett
http://www.accountingtoday.com/news/Independent-Board-Members-Played-Role-Financial-Woes-55972-1.html
See complete research paper – http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1397685

2011_01_19


ComMetrics
_3 assigned readings – Topic 14

- we choose a student to moderate the discussion – you can
volunteer yourself for today or for tomorrow

- please have your notes ready – all students

- chosen reading is:

- could your data management approach result into value that an be
leveraged in your business = data driven management
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ComMetrics
_Tools & Tips – using iPhone, Facebook and your privacy

- What can we do to use these gadgets while making sure we are
protecting our privacy as well as those of ou clients/friends?

- Is this a risk issue? What about compliance?

2011_01_18

>Introduction >Purpose >HowTo _Tools & Tips >Decision >Conclusions

ComMetrics
_Tools versus privacy

> Foursquare – Facebook Geo-Apps
Karsten – Sender
2 associates – did he ask them first
before sending out this tweet

1 - http://twitter.com/kfuellhaas/status/22599443537

2 - http://foursquare.com/venue/571920

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_Tools versus privacy

See also Sessions 8 & 9 risks, mindlessly sharing (9 = steps to do with data)

Do you have a smartphone?

Do you use Facebook
If you have a smartphone, use Facebook your privacy has been
breached....
Here is how you can fix it.

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_Decision time – analyzing the process

- What can an organization do better?

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_Student Case – Angelo Ramella

Sechs Social-Media-Flops.pdf
Umfrage_ Social Media in Unternehmen
Social Media kein Thema bei Schweizer Chefs

-We will related this to Sessions 3, 4 and 10 (see also Research
Metholdogy e-book)

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>Introduction >Purpose >HowTo >Tools & Tips _Decision >Conclusions

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_Student Case – challenge at work

- student presents – class discusses

2011_01_19


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_Google watches – then moves

Challenge


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#1 Google is entering the
Challenge market

Strategy: 18 months after Google announced it open its online
eBookstore on 2010-12-06 Monday with 500„000
books (NYT best seller list included) and
3 mio free books

2011_01_19


ComMetrics

Solution all 6 major US publishers signed on,
Google contracts based on publishers„ existing terms
of sale... = larger share of revenue from sales usually
going to the publisher

http://www.msnbc.msn.com/id/40536192/ns/technology_and_science-tech_and_gadgets/

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_ Google watches –
then moves

Solution All books accessible from Google„s eBooks Web
reader from mobile phones, PCs or dedicated e-
book readers (compatible with 80 e-reading devices)

2011_01_19


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_ Google watches –
then moves

Users„ ‚books„ all stored on Google„s ‚cloud„ of remote servers, as
with its Gmail and Picasa photo services.

Software remembers where a reader left off, even if it was on a diff.
device.

Bookstores can also use Google„s system to sell books.
2011_01_19


ComMetrics
_3 Why it matters – today„s 3 nuggets

1 Why does Berkshire Hathaway„s shares trade at a discount?

2 Does Warrent Buffett know something we do not?

3 Is continuous improvement important - how could creativity and
hard work help?

2011_01_19

>Introduction >Purpose >HowTo >Tools & Tips >Decision _Conclusions

ComMetrics
_One more thing

Where does Amazon fit in the cube
(upper right)?
Where does Google fit with Google
ebookstore

-Download survey data - p. 13
-http://www.consline.com/pressemeldungen/-/blogs/lebensmittel-online-kaufen-amazon-enttauscht-andere-

angebote-bleiben-in-der-nische?_33_redirect=/pressemeldungen

2011_01_19

>Introduction >Purpose >HowTo >Tools & Tips >Decision _Conclusions

My.ComMetrics.com
ComMetrics

Session 14: Warren Buffett to the rescue – analyse, decide...

Presented by http://My.ComMetrics.com (free registration)
http://ComMetrics.com (blog)

Roentgenstrasse 49 Street
social media trends 2011 CH-8005 Zuerich Zip Code

Switzerland Country
ComMetrics blog checklist
+41(0)44 272 1876 Voice

+41(0)76 200 7778 Cell
info@CyTRAP.eu Google Talk
Urs E. Gattiker , Ph.D.
www.ComMetrics.com URL
2008_06_16

Understand the process before starting to innovate - Warren Buffett to the rescue

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