Meeting Forecasts

In class, we discussed the issue with the foremen at the Lima Plant. In manufacturing, your output is usually fixed. Let's say Machine A can deliver 1000 units/hour. After an 8-hour shift, you should have around 8000 units. It is difficult to push this number higher because extra work on the machine might cause it to burn out, thus losing production time.

With that being said, how should sales forecasts be viewed? If the sales team is having difficulty meeting their forecast, is that because leaders set the goals too high or is it because the sales team is not working hard enough. I work in a sales corporation and forecasts are higher than usual, and the sales team is falling behind. As the team falls farther behind, you begin to see motivation dwindle. 

If the goals are set just right, you work hard to meet those goals and you feel satisfied when you do.  When goals are set too far above the mark, you tend to lose motivation. The tricky part is finding out where your organization stands and I’m paying close attention to our sales team to see which direction we’re headed.

Subliminal Advertising

We've all been subject to subliminal advertising. They are the kind of ads you watch without actually realizing there is a hidden message persuading you to buy into something. Now, more than ever, these ads are showing up on YouTube and Facebook.  And if you follow Bloomsburg Businessweek, you'll know that Facebook is the new way to advertise in the future.

Although most revenue is still collected though ads posted on the side of the webpage, Facebook realized the potential to be the top online advertising company during this year’s world cup when Nike aired a three minute commercial called Write the Future. You can find out all the specifics from the article Facebook Sells Your Friends.

Nike was able to reach a huge audience through Facebook because friends would recommend the video to other friends. Soon enough, people are watching the commercial because they think it is a cool video, not because it is an advertisement. With so many social media websites such as Facebook and twitter, this is predicted to be the new way to advertise to the up and coming generation.

I find myself at a loss because I've tried to avoid the social media revolution but it seems I might have to adapt.

Motivation and Mountaineering

In McClelland's article, That Urge to Achieve, it discusses an individuals nACH score, or their need for achievement. While this trait is not high with everyone, I believe it is high within the mountaineering community. I'm fascinated by high altitude mountaineering and I've been reading a lot of books about the topic. I also started watching both seasons of Beyond the Limit, Discovery's series about a group of climbers under the guide Russel Brice who are on a mission to climb Mount Everest. In most instances, the urge to achieve is high and often climbers will sacrifice personal safety to succeed at their goals. 

I am not itching to climb Everest one day, but the whole topic is fascinating. The more I learn, the more I wonder if the need to achieve is applied to everything you do. If your pursuit is in the mountains, do you still work just as hard to advance in other aspects of your life? 

I'd have to say that it takes a special kind of person to pursue any goal that has a chance of failure. If you are the type of person who sets goals for yourself knowing you might fail, then I believe you feel the need to achieve. Failure is not a setback; it is motivation to work harder.  

In the book, No Shortcuts to the Top, Ed Viesturs is the first American to climb all fourteen of the 8,000 meter peaks without the aid of bottled oxygen. His quote sums up this post quite nicely, “I like things that are difficult, physically and mentally; things that are really challenging, things that really maybe take a long time but really push me to my limits.” 

Knowing Isn't Everything

Source: XKCD

This simple comic actually brings out a great point. Knowing the risks actually increases your chances of a negative outcome. In a New Yorker article, Malcom Gladwell talks about how accidents increased when anti-lock brakes were first installed in automobiles and how the challenger explosion was due to an increased level of acceptable risk. He suggests that safety actually creates a false sense of reality. You begin to perceive risk differently because you know the risks. In fact, this is quite the opposite. You are no different than anyone else and knowing the risk can really hold you back.

How does this apply to business? Perhaps leaping blindly into the fray is a better way of doing business. Look at a typical entrepreneur. They are jumping into decisions before they even analyze the risks involved, but it works because of their passion and determination.  

Now think of a good manager. They are not wasting time weighing the risks of every decision. Instead, they are using their instincts to choose the best decision and quickly move onto the next one.

Eiger Dreams and Entrepreneurship

I read an article on HBR about entrepreneurship that stimulated a few thoughts I'd like to share (click here to see the article). Here's a little back-story .

The article best describes entrepreneurship as an addiction that cannot be helped. It has nothing to do with your attitude, organizational style, or lifestyle. You are born with it and you are driven to pursue your goals of entrepreneurship. A lot of climbers are also obsessed. As John Krakaur puts it, "Most climbers aren't in fact deranged, they're just infected with a particularly virulent strain of the Human Condition." In other words, climbers are always looking towards the next great pursuit in order to achieve the most out of life. 

I'm someone who enjoys the thrill of rock climbing, mountain biking, snowboarding, surfing, caving, etc. Chances are if you tell me about a new adrenaline packed adventure, I'll quickly take a liking to it. On the same token, these are all risky activities. Rock climbing gear clearly warns the user in some context "climbing is a sport where you may become seriously injured or die." It takes a special kind of person to climb a mountain where your only protection is a rope attached to a piece of flimsy hardware in the wall.

Now I pose the question to you: 

Is your acceptable economic risk (investing stocks, gambling, pursuing new ventures, etc.) related to your acceptable physical risk (rock climbing, bungee jumping, etc.)?

After talking to a few friends with a similar mindset, they would argue that they are completely unrelated, however, I say differently. A higher level of acceptable risk applies to everything you do. What do you think?

I've included a few pictures in case you're not too familiar with rock climbing.

Alternative Ways to Generate Electricity

Electricity is a secondary power source that is derived from sources such as coal, natural gas, nuclear power, flowing water, and sunlight. Any of these sources that produce electricity must answer and abide by the regulations of the U.S. Federal Energy Regulatory Commission (FERC). The commission’s vision advocates “abundant, reliable energy in a fair competitive market [FERC].”

There is a problem with FERC’s vision; it is hard to say that the market is balanced in today’s global economy. There are foreign competitors in the market who are not strictly regulated, and they have a significant advantage in energy production. Fortunately, the United States is not alone while facing this problem. 20 member states, part of the European Union, are having trouble abiding by newly formed energy efficiency standards [Europa]. These laws put the energy companies between a rock and hard place; it is difficult to conform to these standards without reducing energy outputs, but it is just as difficult to erect a new plant to supply power.

The European Union, along with the United States, seems tied up by standards and regulations that hinder energy production, and forces them to rely on imports. Not surprisingly, the efficiency of U.S. power plants has not changed since 1957, and for good reason [Lozanova]. Energy companies, under the government umbrella, do not operate like normal business where success is profit driven. Instead, power companies are required to sell to their consumers by a price dictated by the government, which gives no profitable incentives to make energy production more efficient. 

With all these government standards and regulations, it is impossible for energy companies to compete in a global market. The laws of the energy industry must change in order for U.S. energy companies to be competitive. 

With the recent disaster in the gulf and the new democratic agenda, we will be moving closer and closer towards alternative energy. Surprisingly, hydro, wind, and solar plants are the most expensive methods. Is it a wise move to use our time and resources to develop these costly alternatives or should we wait until our most efficient, cost-effective methods (coal, natural gas, nuclear) are close to depletion?