Days of conglomerates are over; only focus works?

Every generation needs a revolution - an entrepreneurial revolution

In the 70s and 80s, conglomerates were the in thing.    Harold Geneen and Jack Welch excelled in this by the sheer power of their intellect energy and passion.  The thing is when they were gone, the conglomerates fells by the wayside and collapsed.

These though still followed Welch to be number 1 or No 2 in their market.  Niching was very important.

ITT spun off? What ever remained of it?   How about GE of Welch

The winners are Apple Microsoft, JP Morgan

Only focused business grew and even then it was not enough.  Some are still collapsing as in food business. 

San Miguel would still be a big conglomerate:    food, beverage, alcohol,  infrastructure. energy

Summit:  publication, real estate, airlines, food production, petrochem, power gen

LT - airlines, real estate, tobacco, liquor

Ayala - banking real estate, water (divested) electronics and telecon

Lopez -  broadcasting, energy (divested from DUI)

MVP -  only in telecoms and infrastructure

Conglomerates can only succeed if they have excellent CEO

Berkshire (W. Buffet) succeeded because he focused on stock picking and studying companies.  He did not run companies.  He let their managers do their thing

Toyota focusses on ICE cars.  and quality.  No 1 in car manufacturing for several years.  

Lean system: value added (VA) vs non Value Added (NVA) - ERADICATING WASTE (TIMWOOD)

Every generation needs a revolution - an entrepreneurial revolution

Not all activities are created equal.  Thus we have to make choices and decisions.  Some decisions are more important than others.   Others are just activities.  Thus we put on the top of our lists activities that create value and wealth.

Say in replacing brake pads of a car:    What are the activities involved:

        Activities                                       VA                        Non VA              Time spent

1,  Bring car to garage                                                          /                        5 minutes

2.  Fill up paper works                                                          /                       5  minutes

3.  Endorsement of car to mechanic                                      /                       1 minutes

4.  Mechanic checks car/paper works                                   /                        5 minutes

5.  Mechanic jacks up car                                                      /                        2 minutes

6.  Mechanic removes tires/brake pads       /                                                   10 minutes

7.  Mechanic orders new brake pads           /                                                     2 minutes

8.  Mechanic installs brake pads                  /                                                    2 minutes    

9.  Mechanic reinstalls wheels                                                  /                        2 mechanics

10.  Mechanics lowers jack                                                        /                       2 minutes   

                                          Total                 14                          22                      36

If the total time in the garage of 36 minutes.  only 14 minutes were value added.  In many jobs, there 

are many tasks that non value added.  Some are regulatory though like paper works.  Some tasks are cause of outright waste.  Like TIMWOOD

                      T                -     TRANSPORTATION    (to and fro warehouse, DC, storage bins)

                      I                 -      INVENTORY  (too much, just in time is better, lean stocks)

                      M                -    MOTION   (wasted motion, unnecessary, maarte)

                      W                      WASTE   (of time, maerials, motion, talking, bad workmanship)

                       O                      OVER PRODUCTION (it is better for some factories to stop producing

                                                so as not to waste labor, materials, time and money

                      O                      OVERCONTROL   -  too many cooks spoil the broth.  Too many

                                               sign offs, controller, inspection

                      D                      DELAY   - in payment, waiting for signatures, arrival of materials

                                               solution   D I N (Do it now) Sitting on a problem.  Delaying action  

The goals are:

     1.  Reduce delays

     2.  Reduce waste.  Reduction of waste creates value and wealth

     3.  Make VA robust:   invest in machines and automation  Make it faster and easier.  E. g. make

          it easier to install brakes.  Gather all the tools near the workplace.  Avoid distraction in

          VA tasks

     4.  Lessen parts and steps in VA

     5.  Employ engineers and supervisors to study the much better way.             

US banks took a $517 billion hit, 63 banks to collapse?

Every generation needs a revolution - an entrepreneurial revolution

This is huge.  This is disturbing.  How will this affect US world economic stability?

How will this affect quality of life in US?   World stability