Monday, June 6, 2005

Oops Leave it to ex-editor, now press relations person, John Lewis of Cognex to find a problem on one of my posts. Looks like I had a cut and paste problem, not to mention a re-read and check problem on my May 22 note about a New York Times article on CEO hubris. Below is the original text. Looks like a paragraph was deleted in my cut and paste entry. I feel that an awful lot of mergers & acquisitions are more the result of CEO hubris (pride and ego) than of sound business reasons. Now that would be "an awful lot" not all. So I asked Dr. Bob about that topic. His response was that he agreed that many M&A deals were more about ego than business. However, he went on to expound the sound business reasons for the DVT acquisition. And I concur. Cognex needed two things that were best obtained by the purchase--a well managed distribution system and ease-of-use technology. This deal is a potential win for customers. The many good people who will lose their jobs is the downside. I've been on that side a few times and can sympathize. It's tough, but apparently unavoidable. Evidently the DVT owners were ready to cash out, so a good company is gone. One last note on the article--any time someone links to the NY Times, the value is limited. After a brief period of time, the article goes into archives and is available only to people registered on the site. There's another hurdle where it is beginning to charge for some content. So if you don't catch the post soon, it's probably unavailable. Here's the original: CEO Hubris Hubris, or excessive pride, brought down many a Greek hero in ancient history and mythology. After careful observation of business for many years, I've concluded that many company actions--especially in mergers and acquisitions--proceed more from the excessive ego of a CEO than from any rational business case. Here's a study to provide some documentation to my feelings and observations. In fact, I feel so strongly about this, that I actually brought it up to Bob Shillman of Cognex Corp. when I interviewed him after announcement of the Here's the article from The New York Times about the study: Measuring C.E.O.'s on the Hubris Index. EXCESSIVE pride has been bringing men down at least since ancient Greece. Only recently, however, have researchers begun to study whether hubris explains the otherwise mysterious behavior of corporate chief executives. By By MARK HULBERT. [NYT > Business] 1:46:15 PM    comment []

On Intelligence I had a soccer match cancelled and some airplane travel time, so there was time to catch up on some reading. Not only did I read the Welch book, but I also finished a great book on brain theory. [base "]On Intelligence[per thou] by Jeff Hawkins (the Palm guy). It is a lucid theory about how the brain works with an eye toward building increasingly intelligent machines. The key themes include hierarchical memory and learning from experiences. (there[base ']s more, of course) After you are grounded in his interpretation of current brain research and move to the later chapters, it[base ']s easy (at least for me) to see why intelligent sensors with these self-organizing networks (like Zigbee) linked to better memory devices than we now have are on the right track for truly [base "]adaptive control.[per thou] The future in our business is truly in the sensors/instruments; it[base ']s just that those companies don[base ']t all realize it. A few do, and that will be the interesting thing to watch. When I talk to the people at Phoenix Contact or others like John Berra, president of Emerson Process, or Hesh Kagen at Invensys Process (Foxboro), then I gain confidence that at least some people are moving toward the future. Obviously, I really recommend this book and would even if I hadn[base ']t been a Palm user since they first came out (I think 1996). I recommend reading this along with Antonio Damasio[base ']s books, [base "]The Feeling of What Happens[per thou] and [base "]Descartes[base '] Error,[per thou] to get a real understanding of how people work. While Hawkins limits himself to describing the neo-cortex, Damasio discusses the interrelationships of the brain (electrical signals) and the viscera (gut, chemical signals). One reason I started reading this sort of stuff was that I was curious how people came by their opinions--ideas that they would hold as the truth even when shown facts that contradict everything they are saying. Thus far, I have discovered (in very simple terms) that the brain is capable of believing almost anything (check out all the new age self-help gurus who take this idea and run way too far with it). Then when an idea is associated with a strong emotion (chemical signal from the gut) a strong opinion is formed that will resist all logic. Those of us of a more logical personality type have a great deal of difficulty dealing with these people. Living in western Ohio and teaching Bible and spiritual classes for the last 30 years, I have to deal with many people of that personality type. It's been a great stress release to figure this out and learn to live with it. 9:47:11 AM    comment []

Winning The nice people from GE Fanuc sent the entire press kit from their user conference including a copy of Jack Welch's latest book--Winning. It's a quick read--I read it yesterday--but not really superficial. It contains loads of points from one of America's best managers. One of the key points for me is that leadership includes constant communication of a theme--the vision of where you want to take the company. It reminds me of a section from Arthur Shlesinger's book on the Kennedy administration "A Thousand Days" where he relates the time when President Kennedy realized that even as president, he couldn't just issue an order and be assured that it would be carried out in the bowels of the bureaucracy. Same thing with Welch. He talks about many of the ideas he had for improving the company and how much effort it took--even as CEO--to affect that change. I've worked for large companies and was intimately involved in the budgeting process along with many personnel evaluation instuments and fads. I apprecieated his no-nonsense approach to both. It's a good read. Take a day of your vacation to read it then spend your odd hours thinking about what the ideas can do for you and your company. 8:58:22 AM    comment []