Budget Sequestration is Real even if it is not…

Yes, I know the data is old but bear with me on this. According to a 2003 Brookings study on Public Service, the U.S. Federal Government is composed of 3,900 political appointees, 2.7 million civilian personnel, 1.5 million uniformed personnel, and 5.6 million federal contract workers. This means that the federal contractor workforce is greater than the political appointees, civilian and uniformed personnel combined. I will let this sink in for a while…

As time progresses, the number of federal contract workers is only going to increase over time. These federal contractors are not only the big boys as found on the top 100 federal contracts list but also small companies who may only have one or two contracts with a federal government agency. For an almost complete list of the number of federal contractors visit here. OK, what this means in terms of the ground reality is that when the sequester hits, it will affect the federal contractors community first as it will result in cancellation of contracts, non-renewal of projects and no-issuance of new task orders which will cause hiring freezes and federal contractors looking into other sources of revenue to stay afloat. While the sequester will most definitely affect the small businesses but it will also affect the large federal contractors as well due to the uncertainty caused by lack of appropriate action.

You may ask why we should care about this right now since the sequestration has not happened yet and it will be decided in March if it goes ahead or not. This is where I come in to inform you that even though sequestration has not started officially but just the threat of it has forced federal agencies to unofficially start cutting their budgets and some federal contractors have already frozen hiring somewhat. In my conversation with a federal contractor, they indicated that “we never planned for this.”

So now, let’s connect the dots…simply put sequestration (or threat of sequestration) is resulting in hiring freezes. Since people cannot find higher-paying good jobs with the federal contractors, people have cut down on the consumption of products, services and delayed purchase of any large items.  Since 70% of the U.S. economy is based on consumerism, you can image what long-lasting effects sequestration is having and will continue to have directly within the DC Metropolitan areas but also across the nation.


An Observation of Healthcare at a Clinic…

Last week, I took my wife to a well-known local clinic since she had the flu that is spreading across the U.S this year. Since I had my notebook, I started to make some observations in regard to the overall process and customer service. In the following paragraphs, I will attempt to make a surface-level current state analysis and propose a future state to be considered.

As we walked into the clinic, the receptionist smiled at us and asked how she could help. We explained to her that my wife probably had the flu that is going around. She asked us to sign-in and gave us paperwork to fill out since it was the first time we came to this clinic. While filling out the paperwork, I overheard another person come into the clinic and the receptionist inquired if they had been to the clinic in the last 4 months and if not then paperwork needs to be filled out (again).  After finishing our paperwork, we gave it back to the receptionist and she asked for my wife’s driver’s license. I am assuming that all this information was needed to create a preliminary patient record on the computer.

30 minutes later the nurse called her name and took us to a small room. In this room, the nurse requested my wife to change into a medical gown and gave us some privacy to do so. After 20 minutes the nurse came back and started typing the information in the paperwork into a computer in the room. The computer was placed in a way that the nurse had her back towards my wife. After typing the paperwork information the nurse typed the blood pressure reading, temperature, height, and weight into the computer. During the data entry, I asked the nurse how come my wife still got the flu since she had taken the flu shot a couple of weeks ago. I was explained that the current flu shot only protects against 4 strains of the flu and the flu strain that my wife had is different.

After the nurse left it took about another 15 minutes before the doctor came into the room and looked at the paperwork and inquired about a medication listed that she could not find in the system. This medication is a Tylenol-type medication but since it was not sold in the U.S. there was no record of it and thus we explained to the doctor that the active ingredient was Acetaminophen and the dosage level. After inputting this information into the computer,  the doctor recommended a basic test that would be carried out at the facility.

The doctor left and the lab technician came in about 10 minutes later and took samples for the basic test. Another 20 minutes go by and then the doctor comes into the small room and informs us that nothing serious was found during the test and prescribes antibiotics. The doctor also informs us that she will conduct further tests whose results will be known in the next 48 hours and regardless of the result she will call us. 4 days have gone by and we have not received a call from the doctor.

So that is the current state and it seems pretty typical but now the fun part begins where I propose a few things to think about and how I would hope the process would go in the future…

As we walk into the clinic, the receptionist smiles at us and my wife swipe her health insurance card across a card reader. The card reader signs her in, provides a queue number, the receptionist confirms that the record is accessible and provides a medical gown. After this the receptionist asks if we want to use the self-service kiosk to take readings for blood pressure, temperature, height, and weight or if we prefer that a medical professional take these readings. We prefer the self-service kiosk that takes about five minutes and updates the patient record.  The patient record also contains the flu shot information that my wife took several weeks earlier. This information and the readings taken by the self-service kiosk are not displayed anywhere on the self-service kiosk but it gives the option to the patient if they want to print this information for themselves and gives a list of basic tests that are taken. Additionally, she is glad to have access to her patient records available securely online if she wanted to view them herself to see what medical conditions she has had and the insurances she used in the past.

A few minutes go by and then it is her turn.  We enter a private room that has a sign outside indicating if the patient is ready or not. The doctor comes in and after some inquiry recommends a basic test that we already know about from the self-service kiosk. Then the doctor leaves and the lab technician comes to take test samples. The test is carried out at the facility while we wait in the private room. Additional minutes go by and the doctor shows up indicating that nothing serious was found and prescribes antibiotics. As the doctor is putting this information into the patient record, it indicates if there is a history of any allergic reactions to this antibiotic and if the current medications will have any effect on my wife. The doctor informs about additional tests that will be conducted and if we request they can provide us a printout about those tests.

As we leave, the doctor indicates that an automated message will be sent to the cell phone to indicate if the results have not found anything and we will have a window of about 5 minutes to call back if we want to discuss something further. In the case the doctor finds something that needs to be explored further, she would call us as soon as possible or within 1 day whichever is sooner after the results have been received.

Future Considerations for Kodak

Recently, I was asked to perform an organizational analysis of Eastman Kodak based on an article published in The Economist titled, “The last Kodak moment?”.  Here are my views if I was a new CEO sending a memo to the Board of Directors:

Eastman Kodak has been around for more than 132 years. In these years Kodak has seen the best of times and the worst of times. In the best of times, we were the envy of our competitors and as recently as 1996, we had revenues reaching $16 billion but now we have reported a net loss of $222 million. Some of the issues that I decipher by going over company history are the failures to adapt to new markets and not listening to our customers. While there are certain things beyond our control but there are other things that we can control. Why is that the builder of the digital camera in 1975, we are now at the bottom.

In my current analysis, I have observed that we are structured by our product line. This has worked in the past but we cannot sustain this organizational structure if we have to move forward. It is apparent that the power within the organization resides with the product owners and not the customers. Since we held a majority of the market in the past and were able to keep our competitors at bay, over time we have developed a culture of thinking that the customer will come to us and we do not have to change. Additionally, although we may have the best technology in the past and a highly lucrative intellectual property (IP) portfolio, this is not enough to make Kodak go into the black. In light of all of this I am recommending the following:

Firstly, I recommend changing the structural design of our organization by turning it into a Front/Back organization. The reason for this would be so that our marketing and sales team can directly interface with the clients, work with them to figure out what issues they would like to solve and then develop solutions around them. The customer is king and we have to respect that. Additionally, I would like to open offices in new markets so that we do not surround ourselves with “yes” men only here in Rochester, NY. The new offices would be in India and China where not only that we will have marketing and sales offices but also research and development (R&D) offices.

Secondly, as I read Larry Matteson’s report from 1979, I am surprised that we did not pay attention to the people who could help us divert the current mess that we are in. This will have to change, the feedback and reports that are being generated by our executives who are closer to the action should be held at a greater value. I am recommending an office within Kodak whose purpose solely would be to assess internal and external threats to our corporation and make recommendations. This office will report directly to me so we can erase any management or bureaucratic barriers.

Thirdly, as the strategic design changes, we will be changing the culture of the organization as well by institutionalizing Customer Satisfaction Assessment Reports (CSAR) in which we will solicit feedback from internal and external customers and ask them how they see we can improve the services that we provide. As you are well aware that most of the innovation comes from the people who are at the front lines as well as the customers. Doing this will not only give us a way to improve our current services and products but also open potential markets that we may not be aware of. The flow of this captured information is very important and thus the new office that I mentioned above would also house these suggestions and make actionable recommendations which I will review personally. In this way, I am creating an open door for anyone who has an idea to talk to this team and thus making all levels of the organization realize that we are in this together.

Lastly, I would recommend that the current IP that we have should not be merely sold off so that we can stay afloat. I ask you for how long can we stay afloat by merely selling our IP and how long can we survive. In this regard, I would recommend the beginning of a strong R&D arm which will not only continue to develop new IPs but also help us in developing new product features. This R&D arm will have several offices in several countries so that we are not limited by what we only know here in the USA but we can leverage globalization in a new way and all together for the future of the company.

We are not Fujifilm. We are better!

I look forward to working with you and thank you for your time.

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