Invensys - Haythornthwaite's handsome 2004 pay package

Rick Haythornwaite, who presided over the steep decline during his flashy but ineffective tenure as CEO and is due to retire next month, received a total 2004 pay package of £1.45M (compared with £989,000 last year). The new CEO Ulf Henriksson got a total of £2.18M. Hmmmmm....

The executive bonuses were "based on free cash flow", because Invensys had been so deeply in debt and needed to be rescued. Ulf Henriksson's pay was partly due to the fact that he would have been entitled to large amounts of money, had he stayed with his previous job at Eaton. Interesting way to rationalize these big payouts in a company that's still struggling.

Most people still agree that former CEO Allen Yurko was to blame for the fall of Invensys. A recent weblog comments: "His bully-boy I-will-not-be -contradicted attitude ruined Invensys from the start."

Following the Yurko debacle, Rick Haythornthwaite was touted as the savior. His only claim to fame was getting a good price for Blue Circle when it was sold to the French company, Lafarge. This carried him into the wreck of Invensys, with hopes that he could work some magic. But alas, he drove it still further into the ground.

As I have suggested many times, Haythornthwaite couldn't waite too long, or his "reputation" would be damaged. After hiring a horde of consultants who ruined the company's ethos and drove off its best people, he quit, beaten by the seemingly intractable problems. Reputation??

But, from the magnitude of his handsome bonus last year, you'd think he was departing in triumph. Another year of losses hardly sounds like a justification for a big bonus. The official line (spouted by mouthpiece lackeys) is that, without these geniuses to oversee the refinancing, Invensys would have been "disinvensysed" by now. As it is, the business is just continuing downhill, hoping to be "saved" by Ulf.

We'll wait to see if Happy Haythornthwaite gets a further going-away gift when he leaves in the next weeks. The UK Daily Telegraph editorial comments that his record is "not so much Blue Circle as Black Mark". Two questions remain:

1. Will there be any further exit payments or "golden handshake"?
2. Is there any company so disconnected with the news that they'll hire Rick Haythornthwaite as CEO? Or, will he simply join Allen Yurko as a venture capitalist?

Ten Laws Of The Modern World

1. Moore's Law: Electronic processing gets twice as good every 18 to 24 months, at the same price point. This came from Gordon Moore of Intel in 1965 (40th anniversary this year). Today Moore's Law has transcended silicon chips; it applies to computers, cell phones, games, routers, wireless products and lots more to come.
2. The other side of Moore's Law: Digital stuff gets 30% to 40% cheaper every year, at the same performance point. This is why hundreds of millions of Chinese and Indians now own their personal portals to the global economy.
3. The WinTel law: Every time Intel brings out a new chip to market, Windows software upgrades soak up the new chip's power. Moore's Law constantly enables new software, and brings breakthroughs. More coming.
4. Metcalfe's Law: The usefulness of a network improves by the square of the number of nodes on the network. This law was named after Robert Metcalfe, the inventor of Ethernet. The Internet, like telephones, grows more valuable with more connections. This is how eBay and Yahoo and Google continue to grow so profitable so fast.
5. Gilder's Law: Winner's Waste. The futurist George Gilder's dictum. The best business models waste the era's cheapest resources to conserve the era's most expensive resources. Today's cheapest resources are computer power and bandwidth; both are getting cheaper at the pace of Moore's Law. Google is successful because it wastes computer power (some 120,000 servers power its search engine) to conserves its best resource: smart people. Google has fewer than 3,500 employees, yet it generates $5 billion sales (current run rate).
6. Ricardo's Law: 19th-century law of comparative advantage. The more transparent an economy becomes, the more this law rules. When the price-value proposition is bad, the world knows quickly.
7. Wriston's Law: Capital and talent will go where it is wanted, and stay where it is well-treated. Walter Wriston in his 1992 book, "The Twilight of Sovereignty", predicted the rise of electronic networks and their effects. With this law, you can predict the fortunes of companies and countries.
8. The Laffer Curve. Cut taxes at the margin, on income and capital, and you'll get more tax revenue, not less. From Arthur Laffer then a young economist in the Reaganomics days. With lower taxes, businesses and people become more productive and the pie grows. This is why the US boomed in the 1980s and 1990s, why India is booming now, and why eastern Europe will outperform western Europe.
9. Drucker's Law. You'll achieve greatest results in business and career if you drop the word "achievement", and replace it with "contribution" according to the great management guru Peter Drucker. Contribution puts the focus where it should be - on your customers, employees and shareholders.
10. Ogilvy's Law. If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But if each of us hires people who are bigger than we are, we shall become a company of giants. People make or break businesses. This law was preached to me by Bill Hewlett: Never hire someone who is not better (at what they do) than you are.

Chinese amazed at junk they make for overseas consumers

Chinese operators wonder why anyone ever buy's some of the stuff that they have to make. As they process one large order, along comes another bigger order for the same items - in their view, totally useless. One operator who expressed his opinion has worked as an injection-mold operator since 1996, with a workweek which exceeds 60 hours and earns him the equivalent of $21.

Among the items that he produces are plastic-bag dispensers, microwave omelet cookers, glow-in-the-dark page magnifiers, Christmas-themed file baskets, animal-shaped contact-lens cases, and adhesive-backed wall hooks. And the company produces tens of thousands of pineapple corers, plastic eyeshades, toothpick dispensers, and dog pull-toys. And they wonder about taco-shell holders and silverware-drawer sorters. To them, the buyers seem just plain "stupid".

Recently, several young female workers from Shenzhen said they were locked in a work room for 18 straight hours making inflatable Frisbees. The girls joined hands on the factory floor and began to chant, "No more stupid flying toys for Western pigs!" They lost their jobs. But, this incident illustrates China's growing disillusionment with producing needless rubbish for foreigners.

Steve Cuff, who sent me this interesting item, comments:

"This applies to most of the industrialized world's richest countries. Of course, once the Chinese reach a higher level of industrial development and the average worker starts making enough to buy more than just the basics, they will also start buying some of this junk. Right now they just have a problem with understanding how anyone can be wealthy enough to buy these throw-away products. With prosperity they will start to buy some of our better products as well."

Personal technology - wearing tech clothing

This is all part of what's known as a "pervasive ambient world", where chips are everywhere. Inanimate objects will start to interact with people and soon we'll be surrounded by things that "think".

Science fiction always includes images of devices worn on heads or wrists. But soon, we'll have smart fabrics and textiles which will be exploited to enhance functionality, form, and aesthetics. Such materials are already starting to change how gadgets and electronics are used and designed.

Computers and sensors will be worn in clothing. Electrically conductive fabric can connect to keyboard sewn into sleeves, and have already appeared in stores. These "smart fabrics" have come through advances in nanotech and micro-engineering. At the nanoscale, materials can be "tuned" to display unusual properties to build faster, lighter, stronger and more efficient products.

Smart gadgets already fill up people pockets, briefcases and handbags. But, soon they'll be integrated into clothes - MP3 players, for example, will disappear. Wearable technology could use body heat to charge. People may have "video tattoos". Intelligent contact lenses might function as TV screens. The cyborg, a familiar part-human, part-inorganic science fiction idea, will soon be common.

The textile and clothing industry has been one of the first to exploit nanotechnology in quite straightforward ways. Many developments are appearing in real products in the fields of medicine, defense, healthcare, sports, and communications. For example, nanotech swim suits reduce drag with tiny structures similar to shark skin. Some nanoscale coatings give fabrics antibacterial and anti-odor properties - to stop smelly socks for example. Airline and bus seats will have super stain-resistant surfaces, and windows will clean themselves.

Dressings for wounds will have nanoparticles with biocidal properties; smart patches are being developed to deliver drugs through the skin. There have already been successful experiments to grow human nerve cells on circuit boards, which paves the way for brain implants to help paralyzed people interface directly with computers. As technology infiltrates our biology, how will our brains function differently?

This future of highly personal devices, where technology is worn, or even fuses with the body itself (my techno-human concept again), raises ethical questions. If technology is going to be increasingly part of clothing, jewelry, and skin, there needs to be some serious thinking about what it means for us as humans.

If our clothing, skin, and "personal body networks" do the talking and the monitoring, everywhere we go, it will clearly affect privacy. Your clothes may have a lot of information you really don't want people to know.

Hey, if you're wearing smart make-up to control your appearance, hackers may write messages on your forehead......

TV Viewing Multi-tasking

In the past few years, TV stations have started to reformat their screen presentations to include scrolling screens, sports scores, stock prices and current weather news. These visual elements are all designed to give viewers what they want when they want it. No matter which channel you turn to on TV, you are likely to find multiple messages that overpower the screen - making it difficult to focus on one thing.

Look at any TV news channel:

1. There's the main news program.
2. Pictures or illustrations for the main story.
3. There's a separate BIG caption for the main story.
4. The main story is often split into 2 or 3 pictures, each showing a different view.
5. A box comes up to show who is talking, and who they're talking with.
6. Most programs have a scrolling newsline at bottom - most of the time, it's unrelated to the news being reported.
7. During the day, there's a stock-market numbers report in one corner. This is replaced by weather, sports-scores, or time and temperature.
8. The TV Channel logo is usually passive, but it might flash occasionally to draw more attention.

Some TV sets have PIP - picture-within-picture - and if you're watching 2 channels at once, then you may have 16 messages being flashed at you, all at the same time. Whatodo?

eFeedback

"I got really mad when I read your negative comment on the European Constitution vote. I and my friends jumped for joy when we saw the vote on TV. The purpose of the constitution is to further the advance towards a united states of Europe. You may think that's a good thing, but you don't live here. In earlier times, empires were created by military conquest. Nowadays they are created by politicians, movers and shakers, meeting in secret, who see ways of extending their power by stealth. The process is conducted by lies and deception.

"To quote Arnold Toynbee in his address to the Institute of Pacific Relations in 1933, "We all want to see the destruction of the nation state, but the public is not ready, so we must deny with our mouths what we are doing with our hands".

"The lies we have been told have been revealed by documents declassified under the 30 year rule. The EU is run by an unelected body, whose members are appointed by no open process. If the EU does become a superstate, will it be a democracy? No. It will be a cardboard cutout of a democracy. It will have the superficial appearance of democracy, but it will be run behind the scenes by the movers and shakers who brought it into existence.

"The European Parliament is not designed to have any powers. No real debate takes place. The members are told what to vote for, and do so as many as 80 times an hour by pressing buttons. Huge expenses encourage them to go along with the system.

"The role of the European Commission resembles the old Soviet Politburo. The Politburo made policy, and the parliament acted as a rubber stamp. What will happen to it eventually? It will collapse like all empires, except that this one will collapse quicker than most. Some empires break up cleanly. However, if there has been a deliberate policy of relocating populations, as in the old Yugoslavia, then the breakup can be bloody.

"Lets hope the EU will break up cleanly. At least in Britain we have well defined boundaries so we should come out of it without too much damage.

"The recent vote on the constitution shows that the movers and shakers have become overconfident. This will be the last time they allow the people to have any say in the matter.

"I have always read your articles with enjoyment and enlightenment. However your recent article "EUROPE VOTES FOR THE PAST AS CHINA & INDIA SURGE AHEAD" seems to be out of kilter with some of your previous posts and sentiments.

"From personal experience I am aware that many Indian employees MUST work extended hours else they do not have a job. Most of these extended hours are unpaid (in one case I know of, overtime is only paid after 80 hours has been worked). Likewise I am led to believe that the situation is similar and worse in China. The new "Social Acceptability" standard that several European contracting companies have signed up for and are requiring their subcontractors to adhere to, "bans" these practices.

"At least Europe is starting to realize that a balanced lifestyle is important and that "slavery" is something which is not acceptable (albeit that the pendulum may be swinging too far at present). Can the same be said of China and India? It appears that the fast growth in China and India, is to a lesser or greater extent, driven by "financial slavery". Is this the way we want the world to be? Should we be accepting services delivered in such a manner? You know the answer to that one, from your own experiences."

"A simple thing but one that has caught my interest since I started using the Satellite version of the Google maps is to check the reality of my own area. As a fellow California resident, you know that, unlike Eastern cities (Boston excepted), our roads rarely run straight and in a grid pattern. But that's not always easy to see on the ground. My wife and I were disagreeing on the "best" route to take for some of our common jaunts and seeing the Space View proved that some of our usual routes were winding roads that took more effort, if not miles, to drive. It's opened up a new outlook for our drives.

"Another small use has been to visualize a location mentioned in a news report. For example, a stadium in my old home town was mentioned in a Chicago Tribune Online article and I was able to dial in the address, get the Space View and zoom in to see how the park related to other building in the area (they were closing it down after 60 years).

While I remembered the place from my childhood, I didn't know it was being swallowed up by industrial buildings. Again, a high view gives a different and sometimes more informative idea of how things on the ground relate than just a shoulder-level camera view."