Tuesday, January 16, 2018

Airbus (and Boeing) ten years later...

I wrote this article on ezinesarticles in arch 2006: Some Speculative Thoughts About Strategy Featuring Boeing and Airbus.

  Who could be more aware of the fact that time flies? Who, other than both Boeing or Airbus? Airbus is a European company, Boeing is US based and that is why Airbus will launch a 550 seats aircraft soon, where the strategy of Boeing is to increase speed (speculation # 1). This was a decision made after the announcement of their rival. 

If you are interested in culture and cultural differences, than this Boeing versus Airbus is a very nice topic to follow. The topic is not completely free from speculation, but a curious one. On your way traveling with either Boeing or Airbus, you can observe the lower laying infrastructure; cars and buses driving on the road, for example. There is an interesting difference between these two. A car is typically an individual transporting vehicle, whereas the bus is a collective vehicle. (No, I do not want to link: Air to bus )

If you live in the city, you will know that those individual vehicles could be very inefficient. Traffic jams are order of the day, but people continue to prefer them above a bus or other collective transports. And this is the main point. In business for example there is also a constant rivalry between individual targets and group targets, between the individual approach and the group. Arranging activities between the individual and the group (collective) is what organizing is all about. If you have prepared something alone, there comes a time where you need to discuss it with the group. If you think that you can do all by yourself you are mistaken. Figure this deal you have prepared with a client, and just before closing it, you get ill. Should the organization consider a cancellation of the deal because of an individual issue, or should someone else in the team save the group interest? Teamwork is highly valued these days, yet most structures and bonuses still favor the individual. As is the case for infrastructure.

Now back Boeing and Airbus. The individual wants to go faster and faster. Therefore, I would say that Boeing favors more the individual approach. Where Airbus targets the group. And I think (speculation # 2) that Airbus is right. They should. The Concorde has stopped flying. Speed was a non-issue. The new Airbus looks like a Cruise Ship (a new one -- the largest ever, is just under construction), where you can have fun while you are on your way. Forget the time for a moment.

Now, in January 2018, it appears that Airbus is abandoning its strategy with the A380. That new plane was launched in 2007. Ten years later it seems that too few countries can afford to fly the plane because all seats must be full in order to be profitable...

Update February 14th 2019.  The company confirms that it will stop the production of the A380.

Sunday, April 17, 2016

Quantity First, (Improve the) Quality Next

"Are you sure, shouldn't this be the other way around?"
No, the quantity first, quality next is a logical and wise business rule.

But first of all, this is not about strategy, because even if your
strategic direction is towards cost leadership, you cannot without
quality. Neither is it about what is more important.

This quantity-quality-issue is about the priority in business and
organizing activities. It means that you need to produce a significant
amount of products (quantities) before you can improve the quality of
these products. It is impossible to improve the quality of a product that
is unique on the market and most of all, not even used (yet) by a large
number of people.

The real challenge — After you have designed a product, tested it and
brought to production – – is the acceptance of the product in the market.
This starts with someone buying the product, and someone else, etc… And
only after a certain amount of products (quantity) you can improve the

"But what about those real quality products?" Even there holds the same
rule, but on a different level.

Quality is an abstraction with many definitions. But whatever definition
you take, the quality of a product is never about the function. It is
about additional requirements that are independent of the features of the

For example, you can buy a car because of the model, the color, the extra
features like: airbag, cruise control, board computer, etc. Yet the
quality is not about any of these features. Because you can by a different
model car with exactly the same features, yet the quality of both cars can
differ quite a bit.

Quality is about the invisible aspects of your car. About those things you
don't get preoccupied with the first day you buy it, but what becomes an
issue once you are using it. And using it, and using it!

So quality is about what you do not see at first hand. And this is the
hardest part. Not in the last place if you want to manage (higher)

From management literature we know that any business is about the primary
process and about supporting processes. The primary process produces the
products and services. These are processes where you can measure easily;
the number of products (the quantity).

The supportive processes and the contribution of this support to the end
product is less visible and not always easy to measure.

Imagine the primary process as the accelerator of your car and the
supporting process the brakes. If you want to improve the quality you need
to use the brakes. You need extra control, support, checks and balances
and more of invisible contributions which make the automobile not directly
more attractive but inherently of a higher quality.

Different departments of your organization manage these different
processes. Again, this is not about who is more important. Yet quality
assurance is often seen as a burden and this is a pity, because any
product or service needs quality like a car needs brakes.

So teamwork of both disciplines, like you cannot drive a car without
brakes, but you need some acceleration before you can use them. And too
much speed will damage your image in the end. It's a matter if finding the
right balance.

A copy of an article written for the business edition, march 2006.

Sunday, April 6, 2014

Short history of Gemalto

The French company Gemalto is less than ten years old, yet the history of the company goes back longer. Gemalto is the name after the merger ("amoungst equals") in december 2005 of Axalto Holding N.V. and Gemplus International S.A.

Axalto was the producer of cards and point-of-sale terminals (POS), that enables electronic banking in shops. The growth of the company's business is due to the migration from existing magnetic card-based payment systems around the world to systems which rely on microprocessor card technology.
An important driver of this change to microprocessor card-based systems will be migration to the Europay, MasterCard and Visa (‘‘EMV’’) standard. However, in markets in which magnetic stripe cards are widely used, there is a reluctance to switch to the EMV standard in view of the associated costs. (AR 2013)


Important events in the development of the Company’s business Axalto was created by Schlumberger in order to consolidate into one company all of its card and POS terminal activities, which until then had been managed by several subsidiaries and joint ventures of the Schlumberger group. To create the company, Schlumberger had to reorganize the Cards and POS divisions’ activities so that they could be transferred to the parent company of the Axalto group and its subsidiaries prior to the admission of the Company’s shares to trading on the Premier March´e of Euronext Paris. Subsequently Axalto was successfully listed on the Euronext Paris market on May 18, 2004. (Axalto annual report 2005)

Axalto developed the first telephone chip cards for France Telecom and the Swedish telecommunications operator Telia in the early 1980s...   The high degree of flexibility provided by microprocessor cards, which were a key element of the success of GSM technology, has led to increasing use of microprocessor card technology in a broad range of industries and applications that require highly secure platforms and systems. Axalto has developed expertise in security and encryption, acquired mainly through the development of microprocessor chip cards in the French banking and Proton electronic purse 16systems, and has been and continues to be at the forefront of the development of enhanced security features for microprocessor cards.

Organization of the board:

  • From Axalto, there are still three board-members in the current Gemalto board; Oliver Piou (CEO and CEO of the new combination), Arthur van der Poel (originally from Philips Semiconductors) and Michel Soublin (the only board-member from the original Schlumberger company).
  • Members in the current board that originate from Gemplus are: Alex Mandl (the current Chairman and former CEO of Gemplus), Johannes Fritz and John Ormerod.
  • New recrutements of the current board are: Homaira Akbari (from Skybiz), Bufold Alexander (McKinsey), Drina Yue (Motorola), Yen Yen Tan (from HP) and Philippe Alfroid (from Essilor).

The Senior Management team consists of the following roles:
  • Marketing & president North America, Human Resources, Secure transactions business unit, General counsel and company secretary, Operations, Strategy, Mergers and Acquisitions, corporate projects, Security business unit, Chief financial officer and finally the Telecommunications business unit.