Investment Strategy Comment: The Relentless Pursuit of Innovation
Its Product Innovation, Stupid
In his MSN Money column today, Jim Jubak states ?Firing workers isnt fixing problems,? as he describes the investment prospects of both Motorola and Pfizer. He raises the question of how formerly high growth, high technology, companies with highly regarded stocks could fall on such hard times.
Both companies announced lower earnings in December. ?Shortly after announcing disappointing earnings for the December 2006 quarter — a drop of 31% from 2005 for Motorola and a decline of 16% for Pfizer — the companies announced plans to cut 3,500 jobs and 10,000 jobs, respectively,? wrote Jubak.
Jubaks main point is that firing workers, including 2900 research and development workers at Pfizer, will not solve the problems associated with lower revenues. As a contrary piece of advice, the arrival of lower earning from a legacy product basket would indicate hiring an additional 2900 research scientists.
If only the new workers could be organized into some coherent product innovation system.
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