Posted by Robin Helweg-Larsen on Thu, May 17, 2012 @ 02:03 PM
Google has been buying companies at the rate of one a week for the past couple of years. Most of these companies are bought for under $10 million, but there have been larger high profile acquisitions for nine to 11 digits: $400 million for Admeld (online advertising), $151 million for Zagat (restaurant reviews) and $12.5 billion for Motorola Mobility.
When you look at Google's financial statements in Visual Finance format (with every "stack" being $5 billion), you get a sense of that acquisition strategy:
The "lit" area here shows Google's assets on its Balance Sheet at year end, 2011. The biggest amount is the $35 bn in Short-Term Investments (plus there is another $10 bn in the Cash and Cash Equivalents circle, hidden by the ratio view). The next largest assets are Google's $10 bn in PP&E (upper right), and then $7.5 bn in Goodwill (furthest right).
In other words its Goodwill - the amount that it has paid in excess of book value for its various acquisitions - is almost as much as the entire value of its Property, Plant and Equipment. It grows by buying whatever it needs, and it has the cash to do it. Their high profitability, 26% of sales, demonstrates their strategy is working well.
Google has become a huge part of Andromeda Training's structure, just as it has of many businesses. We respect not just their products and services, but their culture: after all, the visualization and transmission of information, and a reputation for a love of games, is what Income/Outcome and Visual Finance are all about as well.
Robin Helweg-Larsen, President
Posted by Robin Helweg-Larsen on Mon, May 14, 2012 @ 08:42 AM
Some of my favorite quotes for training, and experiential learning in particular:
First, the famous one from Confucius, "I hear and I forget. I see and I remember. I do and I understand." (The first sentence may be more accurately translated as "I hear, I know" - but the meaning is better understood in the more common version.) This is the heart of learning. You can see it in children learning, whether physical skills or social roles - it is always the practising and the acting-out of roles and skills that gives the quickest results, especially through games.
Play allows all people (not just children) to assess their interest in various activities without investing their whole lives in them. It lets them broaden their experiences and their understanding, and find what is the most appealing. Confucius also said “Choose a job you love, and you will never have to work a day in your life.”
Income/Outcome uses business games, business simulations, to engage participants by having them compete against each other in teams. They learn through practicing the analytical and decision-making skills that they need to run a business successfully.
The teacher, particularly in experiential learning, is really only a person who allows the students to learn. That skill in itself is very valuable. And one of the kindest comments for teachers comes from Lee Iacocca, one of the iconic businessmen of the 20th century:
"In a completely rational society, the best of us would be teachers and the rest of us would have to settle for something less, because passing civilization along from one generation to the next ought to be the highest honor and the highest responsibility anyone could have."
People may worry about the cost of providing training. But, as the anonymous quote goes, "What happens if you train people, and they leave? What happens if you don't train them, and they stay?"
Posted by Robin Helweg-Larsen on Fri, May 11, 2012 @ 03:29 AM
Income/Outcome has had a presence in Australia for over ten years. It started with Queensland's Barry Johnson who ran i/o workshops for multinationals in China. Tasmania's Steve Allen saw uses for i/o in the academic world. But it was only when Victoria's Bill Corbett pulled everyone together that Income/Outcome Australia itself was formed.
The business in Australia focuses on Fast-Moving Consumer Goods. Bill and his partners work around the world with global FMCG manufacturers to improve business acumen by using the manufacturing version of Income/Outcome simulations.
They also work with FMCG companies' sales teams, using a retail version of the simulation developed as an Australian initiative in conjunction with the US. This provides sales teams an insight into how their retail customers manage their business.
Income/Outcome Australia will be conducting a program for the Australia Food & Grocery Council in August 2012, for their member companies.
Robin Helweg-Larsen, President
Posted by Robin Helweg-Larsen on Thu, May 03, 2012 @ 02:12 PM
Pepsi is finally fulfilling its famous unintentional promise! On Thursday it announced with Michael Jackson's estate that they will be putting the (deceased) singer on a billion cans of Pepsi.
The headlines reading "Pepsi brings back Michael Jackson" have a natural echo of one of the marketing world's most famous blunders: an early translation into Chinese of "Come alive, you're in the Pepsi generation" as "Pepsi brings your ancestors back from the dead!"
Did that mistranslation even happen? You always have to check rumors out at Snopes.com, and they, well, they don't rule it out. That's good enough for me! It happened!
Bringing Michael back involves business competencies beyond anything that we teach at Andromeda Training. This goes into the realms of either spiritualism or cryonics - take your pick.
The marketing lesson is clearly this: be careful what slogan you put out there - it might be the Universe speaking, delphically and Freudian-slippily predicting your unexpected future.
Robin Helweg-Larsen, President
Posted by Robin Helweg-Larsen on Wed, May 02, 2012 @ 09:42 AM
At Andromeda Training we pride ourselves on having developed the cleanest and clearest visual representation of financial statements - and the most engaging, most versatile, and most useful - in fact, we're just proud of the Income/Outcome design and the Visual Finance iPad apps that it is spawning.
So when another small operation (not a corporate giant, but an individual with a touch of zen) comes up with clean, clear, engaging, versatile and useful designs... well, we feel a kinship. Giorgia Zanellato produces creative items like work-lamps that can be worn on the finger, a collapsible periscope that fits in an envelope, and so on. 
Her vases have been profiled in various locations in the past few months including Fast Company, and deservedly so.
The only drawback - she is an overworked individual, only just starting out on her career, committed to multiple activities. Not everything of hers is available immediately! But we trust she will continue to produce excitingly beautiful things, and we wish her great success.
Posted by Robin Helweg-Larsen on Wed, Feb 22, 2012 @ 09:49 AM
Johnson & Johnson is the butt of jokes because of the announcement about their new CEO. As David Shaywitz says, writing in Forbes: "J&J is replacing their current CEO William Weldon (athletic white male and former sales rep who rose through the commercial organization) with Alex Gorsky (athletic white male and former sales rep who rose through the commercial organization)." Shaywitz wonders if innovation can come from people like this, but notes that it's not unusual in the industry.
J&J's financials are not bad, though. Nothing for the outgoing CEO to be ashamed of. Here they are in Visual Finance:
Approx $13bn in profit, on $60-something bn in sales. Not bad. No real debt. Fairly slow-paying customers, but cash flow doesn't look like a problem at all. Add the basic ratios in, and it confirms it:
Good job, Mr. Weldon!
Robin Helweg-Larsen, President, Andromeda Training, Inc.
'Visual Finance' is available as a free app for iPad; a $7.99 upgrade gives you access to many years of the financial statements of 450 publicly traded companies.
Andromeda Training provides classroom training in business acumen, using the same visual methodology in its Income/Outcome boardgame format.
Posted by Robin Helweg-Larsen on Fri, Feb 17, 2012 @ 06:27 AM
Abbott Labs is often thought of as one of the classic Big Pharma companies, and its structure appears to bear this out (note: 2010 Annual Report information):
- Very profitable, at 13% Return On Sales - though the comparatively high Assets reduce its Return On Assets to less than 8%.
- Very high R&D spend: some 11% of Sales Revenue is plowed straight back into developing new product.
- Slow-paying customers, at 75 Days Sales Outstanding
- Debt under control
- And the largest Asset item is Goodwill - reflecting aggressive expansion through strategic acquisitions.
At a glance, a perfectly healthy drug company - however, what you don't see in this view is that Abbott doesn't even consider itself as a "pharmaceutical" company any longer, but as belonging to the wider "medical" field. And this is what a lot of both its R&D and its acquisitions have focused on.
Abbott Labs is in a state of transition, not out of desperation as can sometimes be the case, but driven by a strategic vision; and the results are good.
(Andromeda Training is proud to have been providing business acumen training for Abbott Labs in the US, UK and Ireland, using the Income/Outcome simulation.
The Visual Finance app for the iPad is available at the app store; the basic app is free, and there is an $8 upgrade available.)
Robin Helweg-Larsen, President, Andromeda Training, Inc.
Posted by Robin Helweg-Larsen on Thu, Feb 16, 2012 @ 01:24 PM
When you look at Schneider Electric's 2010 financial statements (2011 not being publicly available yet) in the Visual Finance app, you can see at once that:
- it's a profitable company, with something under 10% Return On Sales (turning on Ratios would give you the actual figure immediately);
- long-term debt is under control
but two anomalies also stand out:
- It looks like customers are taking an enormously long time to pay - Days Sales Outstanding is well over 90 Days. This is a situation worth checking into in the Notes to the Financial Statements in the Annual Report.
- The largest Fixed Assets item, when you click on it or hover over it, turns out to be Goodwill. In other words, the company has been on a major buying binge and, without racking up excessive debt, has paid well over book value for one or more acquisitions - which would have been done to meet the strategic needs of the company.
So Schneider Electric looks like a profitable company, able to generate cash for its major acquisitions, despite some possible glitch in its Receivables process. It is expanding through acquisitions - you'd have to down-arrow to previous years to see how it has changed from before the acquisitions. Whatever its strategic plan is, the company appears it is fulfilling it.
It will be interesting to see how the results for 2011 compare when they are released.
(Andromeda Training is proud to have been providing business acumen training for Schneider Electric's leadership development and new hire engineers for many years in the US and Mexico. The Visual Finance app for the iPad is available at the app store; the basic app is free, and there is an $8 upgrade available.)
Robin Helweg-Larsen, President, Andromeda Training, Inc.
Posted by Robin Helweg-Larsen on Tue, Feb 14, 2012 @ 01:01 PM
The death of Micron CEO Steven Appleton this month comes at a time of difficulty and change for the company - but difficulty and change has been the norm for Micron and for the entire semiconductor industry for decades. Mr. Appleton was remarkable for his survival skills in several areas of high risk - he knew the risks and relished them.
As the Wall Street Journal reported:
Mr. Appleton was a stunt-plane flier who had survived a previous crash and also raced motorcycles, cars and off-road vehicles. He cut a maverick figure in the industry, guiding Micron through a turbulent battle against much larger Asian competitors in the boom-and-bust market for memory chips.
Micron is the last remaining U.S. competitor in an industry that American companies once dominated, showing a knack for endurance that earned Mr. Appleton the semiconductor industry's highest award in November.
Mr. Appleton's legacy is a company that posted a profit in its last Annual Report. In the semiconductor industry, that is always an accomplishment in itself.
Here are Micron's 2011 Financial Statements in Visual Finance view.
Andromeda Training has provided Income/Outcome business acumen training to managers at Micron for many years. We share their sense of loss, and wish them well in the future.
Robin Helweg-Larsen, President, Andromeda Training, Inc.
Posted by Robin Helweg-Larsen on Mon, Feb 13, 2012 @ 07:21 AM
Apple has been posting amazing financial results for several years, and those results are so good that they are hard to describe.
Look at them in the Visual Finance app (yes, on the iPad from Apple)
With every stack worth $5bn, you can see that its near-25% profitability is giving over $25bn for the year ending September 2011. On the Balance Sheet, it has almost no long-term debt. The largest amount of Fixed Assets is over $55bn of long-term Investments - the largest amount of Other Assets is over $15bn of short-term Investments. Add that to the $10bn in Cash on hand, and you've got $80bn in Cash and Securities that just seems to be sitting there.
Their Return On Assets may be high, at over 20%... but if they disposed of all their unnecessary Cash and Securities (say as Dividends), they would be perfectly functional with ROA at an amazing 70%.
Given that their 2012 Q1 results (not included here) were hugely better than anything prior, and that they are now the highest-worth company in the world, and that their cash and investments are up around the $100bn mark now... all I can say is that Steve Jobs' vision paid off, and CEO Tim Cook is an operational genius.
But what is Apple going to do with that much spare cash? Apple doesn't have a culture of buying things... but it doesn't have a culture of paying dividends, either. The rumor mills are talking about the latter, though.