News about the death of Michael Jackson spread rapidly over the Internet. This caused a huge surge in traffic that pushed some of the biggest websites to the breaking point. R. J. Pittman, Director of Product Management for Google, wrote: "As word spread of [Jackson's] death, millions and millions of people from all over the world began searching for information about the pop icon.... The spike in searches related to Michael Jackson was so big that Google News initially mistook it for an automated attack. As a result, for about 25 minutes [on June 25], when some people searched Google News they saw a 'We're sorry' page before finding the articles they were looking for."

In other words, the event was so momentous that it overwhelmed Internet giant Google. Same for TMZ, Wikipedia and Twitter, according to CNN.

So what does the death of Michael Jackson have to do with strategic decisions? The peak demand is a critical factor in designing any system. How do you handle the situation when all your customers show up at the same time on the same day?

I started my career doing planning and scheduling for an electric utility. In the USA, we expect electric power to be available all the time. In terms of planning, there needs to be enough electric generation capacity to meet demand on the peak days. And in terms of scheduling, no electric generating plant should be offline for scheduled maintenance during the hottest days.

Another problem occurs when other businesses create irresistible promotions - especially when they involve cheap flights or free food. Dan Mitchell of Slate writes: "Oprah Winfrey's decision to put her name on KFC's online coupon promotion turned quickly into a 'PR nightmare'.... there were a lot of angry people who thought they would get a free two-piece Kentucky Grilled Chicken meal but didn't because the store had run out."

When you can't meet demand, bad things happen. Customers become angry and look for alternatives. Even a monopoly like an electric utility is not immune: government regulators will force changes if they can't meet demand.

Better to plan for the peak demand than to be caught by surprise.

Nelya Calev is a local real estate agent and a fellow parent in my son's class. She writes an excellent blog on real estate - much better than the marketing fluff that I see from other real estate agents. Calev has sold a number of foreclosed properties, which she covered in her blog last month.

Calev writes:

The media would like you to think that innocent people are getting booted from the homes they worked so hard to maintain. They would like you to think that it wasn't their fault at all. They are victims of the recession and home crisis, losing their jobs and then not being able to make payments on their home, which winds up in foreclosure because it is already underwater.

Of course, in the field the answer is much different. I'm sure if you look hard enough, there are a few sob stories that can be
told. However, the vast majority of homeowners who I see losing their homes deserved it.

In one home, the owner decided to stop paying the garbage bill and just threw it in his backyard.... In another house, curse words were written on the walls. For another house, the previous owner parked his car outside during one of my open houses and harassed each buyer going in - telling them he had a better house down the street (which was also eventually foreclosed).

I talked with Calev and her husband a few days after she wrote the article. She told me about another foreclosed home where the owner stripped the home bare - even electrical sockets.

These experiences remind us: don't believe everything you hear. Check out the full story - don't blindly accept the usual reports.

I also think this applies to the political crisis in Iran: the Western public has a limited view of the facts. We rely on the official reports from the Iranian government and a few personal accounts leaked through the Internet. Without a reliable source, we can't tell whether this is the start of a revolution - or merely wishful thinking in America.

Photo credit: Ben McLeod

On Friday, Apple released the latest model of the Apple iPhone. Customers lined up for hours to buy one, and Apple got great coverage throughout the press. That evening, the Wall Street Journal reported that iconic Apple founder and CEO Steve Jobs was recovering from a liver transplant two months ago.

Coincidence? I don't think so.

When it was announced that Steve Jobs was taking medical leave, Apple's stock took big losses. As I've written before, there is a perception that Apple would fail without Steve Jobs. But the facts say otherwise - Apple has succeeded during Jobs' medical leave. The successful release of the new iPhone is just one example.

The board and executives at Apple have known about Steve Jobs' liver transplant for months; it was clever to inform the press on the same day that the press reported the enthusiastic customer reaction to the latest iPhone. This was no coincidence.

That said, as I've written before, Apple needs to dispel the myth that Apple would fail without Steve Jobs. The past six months have shown that Apple has established a strategy that succeeds even in the absence of its CEO.

Photo credit: joesflickr.

I've been thinking more about the restructuring of the US auto industry:

• Fiat purchased Chrysler
• Penske is purchasing Saturn from GM
• Tengzhong is purchasing Hummer from GM
• GM is still trying to sell Pontiac

It's safe to assume that these companies are being sold because they aren't successful today.

Now, some brief history: in 1998, Daimler-Benz merged with Chrysler. It was called "a merger of equals" - the largest industrial merger at the time. But this clearly didn't succeed, since Daimler sold Chrysler in 2007. And this year, Chrysler went bankrupt and was purchased by Fiat.

But if Daimler wasn't able to make Chrysler successful, what will Fiat do to fix Chrysler? Put another way, business as usual is what led Chrysler first to a split from Daimler, then to bankruptcy. Fiat will have to make broad changes to Chrysler to turn it back into a profitable business. Trimming labor costs and cutting dealers is a start, but will that be enough?

It doesn't make sense when a buyer says they will make "no changes" to the failed business. Insanity is doing the same thing over and over again and expecting different results.

My calculus teacher in high school had very high standards. He told us that an answer to a math problem was simply right or wrong, and that "careless errors" were still errors. He made a speech that "careless errors" in real-world math can lead to collapsing buildings, crashing airplanes and other mayhem. Thus, he was strict when it came to grading our work, and he was stingy with granting partial credit to incorrect answers. It was a difficult class, but the students learned to be careful, and we were successful.

On Friday, a very troubling story hit the news: construction workers in Georgia demolished the wrong house - they claimed they were given the wrong GPS coordinates. This is exactly the kind of mistake my teacher warned us about.

Carpenters are taught to "measure twice, cut once". In my calculus class, I learned that I always need to check my answer. This is true for any kind of business decision: it is critical to check the recommendation carefully. Great tools and processes are worthless if you make a "careless error" in your analysis. "Garbage in, garbage out."

When I was a teaching assistant in graduate school, I gave the "careless error" speech to my students. They hated it, and it helped make me a very unpopular instructor. I wish I could have shown them this sad story where the wrong house was demolished. It's a great warning - that we should always check our work.

Photo credit: sarflondondunc

This week, Microsoft announced that they will withdraw Microsoft Money from the marketplace. Robbie Cape, former manager of Microsoft Money, told CNET's Ina Fried that Intuit beat Microsoft with better marketing: "Scott Cook ... made Quicken a household name". (I met Cape about a year ago - he's a very sharp guy).

This is an interesting concession from Microsoft. Microsoft never seems to be content with a "profitable niche." Microsoft's strategy: they play to win. Microsoft seldom invents a totally new product, but they are famous for becoming the market leader in an existing market: Internet Explorer, Office, Xbox.

Microsoft tried hard with Microsoft Money. A few years ago, our computer arrived with a free copy of Microsoft Money. Since it was free, we tried switching from Quicken, which I have used since the early 1990s. One day, Microsoft Money crashed. There was no way to recover the lost data; my wife and I lost a year's worth of financial records. We quickly switched back to Quicken.

Technology pundit Joe Wilcox agrees with Microsoft's public statement: that Microsoft is retiring Money because the marketplace changed - that people are using online banking and other online services to manage money. Even if this is true, it makes me wonder: why didn't Microsoft adapt to the changing market? Many Americans have multiple accounts with banks, credit cards, and retirement accounts. Even with online services, the fundamental need still exists: people need a way to manage their money.

Intuit continues to fill that need; Microsoft didn't figure out how to adapt to the changing conditions. Even mighty Microsoft can't win every time.

Photo credit: Shenghung Lin