Video: Ricardo Semler’s Open-Capitalism

I’ve been following Ricardo Semler for many years now.
In 1993, in a fit of madness I slipped a copy of Maverick into the hands of Riley Bechtel – thinking as I did at the time, that this is the only way to get Bechtel to re-engineer itself. Of course I was a little too naive
Today I don’t think I could work at Semco because I’d rather work for myself. But if I had to get a corporate job again (heaven forbid) I’d choose Semco.
Question: when are they opening a “Semco-proper” office in the US? You can check Semco’s company history here.
Anyway, the revolution has happened and it was televised. Here’s what to expect:


And definitely check this out >> (Journeyman Pictures doesn’t understand YouTube – hence the “Embedding disabled by request”)
Open-capitalism is thriving at Semco, and one of these days, it will show up in your industry. What strikes me though is the fact that this model can be used in non-profits, in government (are you listening, Barack Obama?) and even in the fields without hope – like education. Apparently Bill Gates’ foundation is keeping close tabs on Semler’s schooling experiment.

Online Brand Monitoring: A survey of marketspace analytics vendors and why they fall short

From GE to Target, from IBM to Best Buy, companies of all stripes and sizes are struggling to quantify the effects of Web 2.0 on their companies. What are the blogs saying? Are they positive or negative? What’s happening on Second Life? Where are our customers congregating? Who are the influencers in the marketspace?
The result of this anxiety is a new booming business in “marketspace analytics”—companies that profess to track your brand over time and alert you to news (bad or good) in real time.
Given some of the new findings about buzz in the blogosphere (positive online buzz for cars and trucks doesn’t necessarily translate to volume sales) you have to ask, are they wasting their time?
My take on this is somewhat biased. I view all of these brand monitoring products as the online equivalent of the traditional press-clipping tracking function the PR companies used to cling to as a way to justify their existence.
That said, online brand building is a critical competence for today’s marketer. What matters is not online buzz which is a temporary spike in attention, but what that buzz does to your position in your online ecosystem.
Your competitive position in your ecosystem determines your destiny:
• How do you and your competitors compare in terms of return on marketing investments and relative share of the ecosystem?
• How are the leaders making money, and what is their approach in the ecosystem?
• What is the full potential of your business position in the ecosystem?
• How big is your marketspace—the size of the ecosystem you want to compete in?
• Which parts of the ecosystem are growing fastest?
• Where are you gaining or losing share in the ecosystem or sub-ecosystems you compete in?
• What capabilities are creating a competitive advantage for you in the ecosystem?
• Which capabilities need to be strengthened or acquired to help you compete in the ecosystem?
Because we couldn’t find anything to help us with these questions, we decided to build it ourselves. That’s how our Ecosystem Intelligence™ service came into existence:
(i) to help measure a company’s position in the ecosystem(s) it competes in, and
(ii) to help improve that position in the marketspace over time
Now let’s check out some of the competing brand monitoring vendors:
Biz360: provides customer opinion measurement from thousands of expert and consumer product review websites, shopping sites, blogs and message boards
Cymfony: rated highly by the tech analysts, they claim to “quantify your amount of coverage as well as get expert qualitative interpretation of how effectively your message is being picked up in traditional and social media.”
Skygrid: a search tool that sifts through hundreds of web and mainstream media to show you just one thing: whether the balance of the news on a public company is good or bad, and how the “mood” is changing.
BrandIntel: collects, processes and analyzes online consumer content and applies human analysis to the results in context.
Factiva: monitors your competitors, customers, and industry, with in-depth research and company financial data reports.
MotiveQuest: “sees” the “peaks of passion” in online conversations to understand customer motivations. Again, a combination of proprietary software and human analysts to explore what drives customer behavior.
Nielsen Buzzmetrics: measures consumer-generated media to help companies understand consumer needs, reactions and issues. They use a data-warehouse approach to index customer sentiment.
Scout Labs: allows users to track brands and reactions to those brands. In essence, the company helps companies make sense of positive and negative brand sentiment in blogs, user generated videos, and images.
Umbria: analyzes social media—including blogs, message boards, Usenet, and product review sites. Umbria also adds human insights to their data reports.
And there you have it, all variations on the press-clipping theme.
And unfortunately most companies (including the ones above) don’t get it.
It’s not about tracking buzz, it’s about starting a conversation.
Seth Godin gets it.

Marketing in a Downturn

Seth Godin writes about “marketing in a recession” :
The challenge for marketers is to figure out how to change the story they are living so that their customers can change the story they tell themselves. What you make, where you make it, who makes it, how it’s priced and sold and … it all adds up to a perception. If you change these elements the story will change too.
His point is that Starbucks becomes the indulgence of someone who has just traded down to a small rental apartment. Gone are the days of $4.00 coffee just for the heck of it.
I think Starbucks is busy changing their story. They’re trying to be a new, upscale McDonald’s – rapidly working to add in a “drive-in have a happy meal” component to their business model. The trouble is in the demographics. Bill Tancer at TIME tells us that “the Big Mac customer base has remained relatively stable, while Starbucks’ coffee-drinkers have diversified. It used to be that Starbucks attracted customers from a small, elite segment of the country; now, its visitors pervade many more segments across America.”
From my own observations at the local Target, I see far more customer buying ICEEs rather than Starbucks coffees. This is the “threat of substitution” that is always around the corner, no matter how good your product is. Seems like the days of mass-luxury are over.
So where does retail find its consumer, er, citizen? Turns out they’re not citizens at all – you’ve got to sell overseas. India and China are experiencing a huge boom in luxury, thanks to an explosion in middle class prosperity. The fortune is in the middle and the bottom of the pyramid.
And if you can’t reach those consumers? I wrote about that in an earlier post about advertising in a recession.

Kevin Coyne’s 21 Questions for Developing New Products

The December 2007 HBR had an interesting article by Kevin Coyne called Breakthrough Thinking from Inside the Box. There’s far more to this article than just the 21 questions, so I urge you to go grab it here!
The approach Coyne and friends describe supposedly works better than brainstorming or strict quantitative analysis >>
“De-average” buyers and users
Which customers use or purchase our product in the most unusual way?
Do any customers need vastly more or less sales and service attention than most?
For which customers are the support costs (order entry, tracking, customer-specific design) either unusually high or unusually low?
Could we still meet the needs of a significant subset of customers if we stripped 25% of the hard or soft costs out of our product?
Who spends at least 50% of what our product costs to adapt it to their specific needs?
Explore unexpected successes
Who uses our product in ways we never expected or intended?
Who uses our product in surprisingly large quantities?
Look beyond the boundaries of our business
Who else is dealing with the same generic problem as we are but for an entirely different reason? How have they addressed it?
What major breakthroughs in efficiency or effectiveness have we made in our business that could be applied in another industry?
What information about customers and product use is created as a by-product of our business that could be the key to radically improving the economics of another business?
Examine binding constraints
What is the biggest hassle of purchasing or using our product?
What are some examples of ad hoc modifications that customers have made to our product?
For which current customers is our product least suited?
For what particular usage occasions is our product least suited?
Which customers does the industry prefer not to serve, and why?
Which customers could be major users, if only we could remove one specific barrier we’ve never previously considered?
Imagine perfection
How would we do things differently if we had perfect information about our buyers, usage, distribution channels, and so on?
How would our product change if it were tailored for every customer?
Revisit the premises underlying our processes and products
Which technologies embedded in our product have changed the most since the product was last redesigned?
Which technologies underlying our production processes have changed the most since we last rebuilt our manufacturing and distribution systems?
Which customers’ needs are shifting most rapidly? What will they be in five years?
Finally, if you want to hire Kevin Coyne, he’s available here >>

Everybody’s Going Surfin’ – Catching the Innovation Wave

The latest in a series of Innovation on the Edge articles to appear in BusinessWeek, Catching the Innovation Wave is a clever lesson in how innovation occurs at the relevant edge.

John Hagel and JSB ask executives to:
1. “find relevant edges that will test and push their current performance.”
2. “attract motivated groups of people to these edges to work together around challenging performance issues.”
3. “recognize that the people who are likely to be attracted to the edge are big risk-takers.”
4. “recognize that the edge fosters not just risk-taking, but very different cultures that are also ‘edgy.’ ”
5. “find ways to appropriate insights from adjacent disciplines and even more remote areas of activity.”
6. “bring users and developers of technology close together.”
7. understand “the loose practice network that evolved around big wave surfing.” Performance breakthroughs occur “when seasoned practitioners engage with the technology, especially in close-knit communities, and evolve their practices to better use it…”
Watch the surfing slideshow here, and read a longer version of the article on John’s blog >>

Double Loop Marketing: The Blogging Model

Almost every day I get an email from someone asking for “the simplest way to use double loop marketing.”
And I ask them: “Are you blogging yet?”
The simplest form of double loop marketing is the double loop blogging model. It is best used to establish a thought-leadership position – generally embodied by the CEO or a senior executive in the company who is either an expert in the field already, or wishes to establish themselves as one.
It works for large enterprises talking to the masses although it is more effective for SMBs and non-profits targeting a specific audience in their industry.

The four components of the double-loop blogging model are as follows:
1. Thought-Leadership Blog
Goal: Build mindshare
This is the most important component of the double loop marketing model in terms of attention management. The blog helps you establish your credentials and build a relationship with readers. With a few exceptions, it helps if you blog regularly covering topics which entertain and educate. Relax, and be yourself. Be authentic. Don’t blog if you see it as a chore.
2. Vendor Site
Goal: Sell products and services
This is the “second loop” component of the double loop marketing model. The job here is conversion to sales. If you don’t make it easy for customers to buy, they wont. The focus here is helping customers buy with the least amount of hassle. Trust is established through the testimonials (and case studies) of name brand clients. The buying process must be as simple and clean as possible. Support and post-sales interactions are critical to building profitability with follow-on sales. The post-sales funnel must be designed before you sell your first product.
3. Newsletter
Goal: Trust Building & Conversion
Your newsletter is the best way to build loyalty and drive prospects back to your “vendor site” every month. Despite the rumors you may have heard, email is far from dead. Our clients experience a 25-30% boost in revenue each month from their newsletters. The newsletter must be a thought-leadership vehicle, not a sales-driven tool. This makes it an effective vehicle for viral marketing: everytime you send out your newsletter, more people opt-in and become a part of your list. This is the simplest and most effective way to escape the tyranny of search engines and the PPC game.
4. Management
Goal: Process Optimization & Ecosystem Positioning
The management of the three elements mentioned above is a process unto itself. It’s function is optimization – finding and turning prospects into profitable customers at the lowest possible cost.
This component includes devising an ecosystem positioning strategy for the blog, conversion strategies for the vendor site, and opt-in and delivery strategies for the newsletter. All aspects of execution must be tracked and measured against a baseline to continuously improve performance.
Pretty simple, isn’t it? So why aren’t you blogging yet?!

Advertising in a Recession: Bye-Bye Magazines and TV?

The Economist tells us that Hyundai almost yanked its Super Bowl advertising due to economic concerns. At the last minute, they decided to stay put.
Yank it, I say. And spend the money advertising on the Internet!
The article goes on to tell us that: “Marketing spending is one of the first things companies decide to cut when faced with slowing sales.”

This is true, but only when companies don’t understand marketing. Which means despite what Maurice Lévy at Publicis Groupe and Sir Martin Sorrell at WPP are saying, look for a crash in marketing spend.
The NY Times tells us “Forecasters Say Madison Avenue Will Escape a Recession, Just Barely.”
I say they’re wrong.
We know that the research tells us that recessions clearly reward aggressive advertisers and destroy timid ones.
In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies covering 16 different SIC industries from 1980 through 1985. Results showed [hat tip to MacTech] that business-to-business firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn’t keep up their advertising.

Sales for the companies studied were relatively even before the recession, but varied sharply during and after. Companies that cut advertising during both of the recessionary years maintained flat sales during the period and only modest sales growth in the following two years. In contrast, the companies that maintained their advertising experienced significant sales growth throughout the four-year period.

According to the study and contrary to popular belief, cuts in advertising during a recession decrease net income over the long haul. Companies that maintained advertising during the recession enjoyed measurably higher net income gains not only during the recession, but even more so, two years after the recession. This in stark contrast to those companies those companies that cut advertising both years and significantly reduced their profits during the recession, and for years following.
On top of that, my friend Sundar Bharadwaj insists that “the impact of branding on firm performance outweighs both the impact of the competitive environment and resource allocation.”
But that, ladies and gents, was before the Internets.
Now, we’re going to see something we’ve never seen before. The end of advertising as we know it. If the Olympics go south, as they just might especially given the lame coverage we’ve seen in the past, I expect that TV will be hit hardest, followed by print – magazines and periodicals.
Radio will stay flat, and the biggest (and only) gainer will be online advertising.
I’m convinced we’re going to see a boom in marketspace analytics.
Smart money will focus on ecosystems. They’ll know exactly where to advertise to get the best response to drive quarterly results.
Ask yourself:
– Are we in the right ecosystem to begin with?
– Who are we competing against really? (versus who we believe we are competing against)
– Where do we stand vis-à-vis our competitors?
– Who else is in our ecosystem? Are they neutral, friends, or enemies?
– What are the microtrends? Are we gaining or losing on the competition?
– What are the keywords being used to dominate our ecosystem?
– Are there any potential partners in the ecosystem we want to compete in?
– Is our target demographic well represented in our actual ecosystem?
– Do we need an offensive or defensive strategy to challenge the competition? Can we do both?
– Where does the traffic for our ecosystem come from? Is it global?
– What must we do in the short-term to compete? What about the long-term?
– Where should we be advertising?
– Can we dominate our industry ecosystem?
Welcome to ecosystem marketing.

8 Business Tech Trends to Watch in 2008

The McKinsey nerds have been doing their homework. In particular they seem to be paying attention to the ideas of McKinsey alumnus John Hagel who foretold almost every single one of these “trends” a decade ago.
In Eight business technology trends to watch they tell us that “Technology alone is rarely the key to unlocking economic value: companies create real wealth when they combine technology with new ways of doing business.”
Here are the eight technology-enabled business trends they’ve identified:
1. Distributing cocreation
“Technology now allows companies to delegate substantial control to outsiders—cocreation—in essence by outsourcing innovation to business partners that work together in networks.”
2. Using consumers as innovators
“As the Internet has evolved—an evolution prompted in part by new Web 2.0 technologies—it has become a more widespread platform for interaction, communication, and activism. Consumers increasingly want to engage online with one another and with organizations of all kinds. Companies can tap this new mood of customer engagement for their economic benefit.”
3. Tapping into a world of talent
“Top talent for a range of activities—from finance to marketing and IT to operations—can be found anywhere. The best person for a task may be a free agent in India or an employee of a small company in Italy rather than someone who works for a global business services provider. Software and Internet technologies are making it easier and less costly for companies to integrate and manage the work of an expanding number of outsiders, and this development opens up many contracting options for managers of corporate functions.”
4. Extracting more value from interactions
“The application of technology has reduced differences among the productivity of transformational and transactional employees, but huge inconsistencies persist in the productivity of high-value tacit ones. Improving it is more about increasing their effectiveness—for instance, by focusing them on interactions that create value and ensuring that they have the right information and context—than about efficiency. Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations—smarter and faster ways for individuals and teams to create value through interactions—that will be difficult for their rivals to replicate. Companies in sectors such as health care and banking are already moving down this road.”
5. Expanding the frontiers of automation
“Companies, governments, and other organizations have put in place systems to automate tasks and processes: forecasting and supply chain technologies; systems for enterprise resource planning, customer relationship management, and HR; product and customer databases; and Web sites. Now these systems are becoming interconnected through common standards for exchanging data and representing business processes in bits and bytes. What’s more, this information can be combined in new ways to automate an increasing array of broader activities, from inventory management to customer service.”
6. Unbundling production from delivery
“Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever-smaller increments cost effectively. Information and communications technologies handle the tracking and metering critical to the new models and make it possible to have effective allocation and capacity-planning systems.”
7. Putting more science into management
“Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models. From “ideagoras” (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data.”
BTW, this “trend” is owned by one Tom Davenport.
8. Making businesses from information
“Accumulated pools of data captured in a number of systems within large organizations or pulled together from many points of origin on the Web are the raw material for new information-based business opportunities.”
Take for example, ecosystema >>
So what have they left out? What business-tech trends have they overlooked?
Here are a few I came up with:
a. Internal Branding
The use of technology to improve internal communications and encourage employee engagement. Read up on Tammy Erickson!
b. The Return of Online Communities
An old idea, but with Web 2.0, companies must learn to engage their partners, suppliers, customers, and yes their competition. This does overlap trend # 4 (extracting value from interactions) but it’s far more than that. More about this from John Hagel >>
c. Greenwashing
Every business, even in the technology world, must learn how to become sustainable in this age of environmental activism. Companies that do so half-heartedly will pay the price.
d. Authentic Marketing
Using technology to drive a company’s message to capture attention using techniques that are authentic and reflect the core values of the company. The key to this will be ecosystem management.
What else?

Chindogu anyone?


Being stalked? Just go ahead and camouflage yourself as a Coke machine.
Martin Fackler’s NYTimes article Fearing Crime, Japanese Wear the Hiding Place gives us a look at the peculiar world of Japanese innovation.
Writes Fackler:
[Japan is] home to a prolific subculture of individual inventors, whose ideas range from practical to bizarre. Inventors say a tradition of tinkering and building has made Japan welcoming to experimental ideas, no matter how eccentric.
“Japanese society won’t just laugh, so inventors are not afraid to try new things,” said Takumi Hirai, chairman of Japan’s largest association of individual inventors, the 10,000-member Hatsumeigakkai.
In fact, Japan produces so many unusual inventions that it even has a word for them: chindogu, or “queer tools.”

A chindogu manifesto is available online for all you budding inventors. The ten tenets are:
1. A Chindogu cannot be for real use.
2. A Chindogu must exist.
3. Inherent in every Chindogu is the spirit of anarchy.
4. Chindogu are tools for everyday life.
5. Chindogu are not for sale.
6. Humor must not be the sole reason for creating Chindogu.
7. Chindogu are not propaganda.
8. Chindogu are never taboo.
9. Chindogu cannot be patented.
10. Chindogu are without prejudice.
And here are a few examples of chindogu from the King of Chindogu – Kenji Kawakami.
Finally, here’s more from the International Chindogu Society. Check out the “portable zebra crossing” >>

Cool Company: Norway’s TH!NK


Another product innovation company, TH!NK is just a fantastic Norwegian company whose time has come. The green cousin of the SMART car… that’s how I think of it.
CEO Jan-Olaf Willums says that this car is coming WIFI enabled, with insurance, and most importantly, with no carbon emissions.
Sounds great! This is destined to be the iPod of cars – everyone will want one, just to be cool, if nothing else. Heck, this is what China and India need as well, not more pollution causing tin-can cars.

Cool Companies: Germany’s Q-Cells AG

John Hagel reminds us that most businesses are in fact a combination of three very different kinds of models:
Infrastructure management businesses (IMB) – high volume, routine processing businesses – think of contract manufacturers, logistics providers and call center operators as relatively pure play examples of these businesses
Customer relationship businesses (CRB) – businesses that get to know individual customers extremely well and, based on that understanding, help to access relevant resources for these customers – relatively pure play examples of these businesses include large advisory firms that help large enterprise customers decide what form of IT outsourcing to pursue and help these large enterprises to evaluate and negotiate with the right mix of outsourcing service providers.
Product innovation and commercialization businesses (PIC) – businesses that focus on developing innovative new products and services, getting them into market quickly and accelerating adoption of the products – think of semiconductor firms operating without their own fab facilities as relatively pure play examples of these businesses.

I love product innovation businesses – in some ways they are the best hope for the creative individual because they are by very nature more entrepreneurial and performance-based.
Which brings me to one of these companies…
Take a look at Germany’s Q-Cells AG.
Their focus is simple: develop, produce and sell high-performance solar cells. The goal? To drive the photo-voltaic industry to competitiveness.
Don’t forget to check out the Solar Taxi!

Intelligent Aggregation: TheIssue.com

The previous post on this blog just got picked up by theissue.com – which describes itself as a “blog newspaper.”
The site describes itself as follows:
The Issue is a non-partisan blog newspaper that provides a window to an emerging world of diverse and informed opinions. We cull the blogosphere for its wise insights, probing analyses, and diverse perspectives, drawing together a borderless newspaper. By combining the democratization and diversity of new media with the format and editorial standards of traditional news, we hope to offer a hybrid news source that provides the best of both worlds.
Now I don’t usually believe anyone who says they’re non-partisan (all the Republican attack sites do this), but I do understand the concept. In essence, this is a very valuable function, one that delivers real value to the busy reader.
I think we’re about to see a flood of these blog aggregators in the marketspace – many of them tightly focused on niche topics.
The news media is actually fairly weak at blog aggregation, even though it’s a technique which could help them drive traffic and revenue. Especially if they’d embed videos.

Snorkeling in a Red Ocean: Yahoo’s ‘Peanut Butter Manifesto’

Read John Hagel’s post “Internet Strategy – Red Ocean or Blue Ocean?” then take a look at this >>
[From the WSJ]
An internal document by Brad Garlinghouse, a Yahoo senior vice president, says Yahoo is spreading its resources too thinly, like peanut butter on a slice of bread. Full text of the document is below.
Three and half years ago, I enthusiastically joined Yahoo! The magnitude of the opportunity was only matched by the magnitude of the assets. And an amazing team has been responsible for rebuilding Yahoo!
It has been a profound experience. I am fortunate to have been a part of dramatic change for the Company. And our successes speak for themselves. More users than ever, more engaging than ever and more profitable than ever!
I proudly bleed purple and yellow everyday! And like so many people here, I love this company
But all is not well. Last Thursday’s NY Times article was a blessing in the disguise of a painful public flogging. While it lacked accurate details, its conclusions rang true, and thus was a much needed wake up call. But also a call to action. A clear statement with which I, and far too many Yahoo’s, agreed. And thankfully a reminder. A reminder that the measure of any person is not in how many times he or she falls down – but rather the spirit and resolve used to get back up. The same is now true of our Company.
It’s time for us to get back up.
I believe we must embrace our problems and challenges and that we must take decisive action. We have the opportunity – in fact the invitation – to send a strong, clear and powerful message to our shareholders and Wall Street, to our advertisers and our partners, to our employees (both current and future), and to our users. They are all begging for a signal that we recognize and understand our problems, and that we are charting a course for fundamental change. Our current course and speed simply will not get us there. Short-term band-aids will not get us there.
It’s time for us to get back up and seize this invitation.
I imagine there’s much discussion amongst the Company’s senior most leadership around the challenges we face. At the risk of being redundant, I wanted to share my take on our current situation and offer a recommended path forward, an attempt to be part of the solution rather than part of the problem.
Recognizing Our Problems
We lack a focused, cohesive vision for our company. We want to do everything and be everything — to everyone. We’ve known this for years, talk about it incessantly, but do nothing to fundamentally address it. We are scared to be left out. We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don’t talk to each other. And when we do talk, it isn’t to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics.
Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like — rather than a leadership team rallying around a single cohesive strategy.
I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.
I hate peanut butter. We all should.
We lack clarity of ownership and accountability. The most painful manifestation of this is the massive redundancy that exists throughout the organization. We now operate in an organizational structure — admittedly created with the best of intentions — that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.
Equally problematic, at what point in the organization does someone really OWN the success of their product or service or feature? Product, marketing, engineering, corporate strategy, financial operations… there are so many people in charge (or believe that they are in charge) that it’s not clear if anyone is in charge. This forces decisions to be pushed up – rather than down. It forces decisions by committee or consensus and discourages the innovators from breaking the mold… thinking outside the box.
There’s a reason why a centerfielder and a left fielder have clear areas of ownership. Pursuing the same ball repeatedly results in either collisions or dropped balls. Knowing that someone else is pursuing the ball and hoping to avoid that collision – we have become timid in our pursuit. Again, the ball drops.
We lack decisiveness. Combine a lack of focus with unclear ownership, and the result is that decisions are either not made or are made when it is already too late. Without a clear and focused vision, and without complete clarity of ownership, we lack a macro perspective to guide our decisions and visibility into who should make those decisions. We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis.
We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.
• YME vs. Musicmatch
• Flickr vs. Photos
• YMG video vs. Search video
• Deli.cio.us vs. myweb
• Messenger and plug-ins vs. Sidebar and widgets
• Social media vs. 360 and Groups
• Front page vs. YMG
• Global strategy from BU’vs. Global strategy from Int’l
We have lost our passion to win. Far too many employees are “phoning” it in, lacking the passion and commitment to be a part of the solution. We sit idly by while — at all levels — employees are enabled to “hang around”. Where is the accountability? Moreover, our compensation systems don’t align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren’t adequately recognized for their efforts.
As a result, the employees that we really need to stay (leaders, risk-takers, innovators, passionate) become discouraged and leave. Unfortunately many who opt to stay are not the ones who will lead us through the dramatic change that is needed.
Solving our Problems
We have awesome assets. Nearly every media and communications company is painfully jealous of our position. We have the largest audience, they are highly engaged and our brand is synonymous with the Internet.
If we get back up, embrace dramatic change, we will win.
I don’t pretend there is only one path forward available to us. However, at a minimum, I want to be part of the solution and thus have outlined a plan here that I believe can work. It is my strong belief that we need to act very quickly or risk going further down a slippery slope, The plan here is not perfect; it is, however, FAR better than no action at all.
There are three pillars to my plan:
1. Focus the vision.
2. Restore accountability and clarity of ownership.
3. Execute a radical reorganization.
1. Focus the vision
a) We need to boldly and definitively declare what we are and what we are not.
b) We need to exit (sell?) non core businesses and eliminate duplicative projects and businesses.
My belief is that the smoothly spread peanut butter needs to turn into a deliberately sculpted strategy — that is narrowly focused.
We can’t simply ask each BU to figure out what they should stop doing. The result will continue to be a non-cohesive strategy. The direction needs to come decisively from the top. We need to place our bets and not second guess. If we believe Media will maximize our ROI — then let’s not be bashful about reducing our investment in other areas. We need to make the tough decisions, articulate them and stick with them — acknowledging that some people (users / partners / employees) will not like it. Change is hard.

2. Restore accountability and clarity of ownership

a) Existing business owners must be held accountable for where we find ourselves today — heads must roll,
b) We must thoughtfully create senior roles that have holistic accountability for a particular line of business (a variant of a GM structure that will work with Yahoo!’s new focus)
c) We must redesign our performance and incentive systems.
I believe there are too many BU leaders who have gotten away with unacceptable results and worse — unacceptable leadership. Too often they (we!) are the worst offenders of the problems outlined here. We must signal to both the employees and to our shareholders that we will hold these leaders (ourselves) accountable and implement change.
By building around a strong and unequivocal GM structure, we will not only empower those leaders, we will eliminate significant overhead throughout our multi-headed matrix. It must be very clear to everyone in the organization who is empowered to make a decision and ownership must be transparent. With that empowerment comes increased accountability — leaders make decisions, the rest of the company supports those decisions, and the leaders ultimately live/die by the results of those decisions.
My view is that far too often our compensation and rewards are just spreading more peanut butter. We need to be much more aggressive about performance based compensation. This will only help accelerate our ability to weed out our lowest performers and better reward our hungry, motivated and productive employees.
3. Execute a radical reorganization
a) The current business unit structure must go away.
b) We must dramatically decentralize and eliminate as much of the matrix as possible.
c) We must reduce our headcount by 15-20%.
I emphatically believe we simply must eliminate the redundancies we have created and the first step in doing this is by restructuring our organization. We can be more efficient with fewer people and we can get more done, more quickly. We need to return more decision making to a new set of business units and their leadership. But we can’t achieve this with baby step changes, We need to fundamentally rethink how we organize to win.
Independent of specific proposals of what this reorganization should look like, two key principles must be represented:

Blow up the matrix.
Empower a new generation and model of General Managers to be true general managers. Product, marketing, user experience & design, engineering, business development & operations all report into a small number of focused General Managers. Leave no doubt as to where accountability lies.

Kill the redundancies.
Align a set of new BU’s so that they are not competing against each other. Search focuses on search. Social media aligns with community and communications. No competing owners for Video, Photos, etc. And Front Page becomes Switzerland. This will be a delicate exercise — decentralization can create inefficiencies, but I believe we can find the right balance.
I love Yahoo! I’m proud to admit that I bleed purple and yellow. I’m proud to admit that I shaved a Y in the back of my head.
My motivation for this memo is the adamant belief that, as before, we have a tremendous opportunity ahead. I don’t pretend that I have the only available answers, but we need to get the discussion going; change is needed and it is needed soon. We can be a stronger and faster company – a company with a clearer vision and clearer ownership and clearer accountability.
We may have fallen down, but the race is a marathon and not a sprint. I don’t pretend that this will be easy. It will take courage, conviction, insight and tremendous commitment. I very much look forward to the challenge.
So let’s get back up.
Catch the balls.
And stop eating peanut butter.

Carr: Top-Down Disruptive Innovation

Our friend Nicholas “IT Doesn’t Matter” Carr has written a wonderful essay on top-down innovation – the anti-thesis to Clayton Christensen’s Innovator’s Dilemma.
Carr tells us that top-down disruptive innovations actually outperform existing products when they’re introduced, and they sell for a premium price rather than at a discount.
Exhibit A: Apple’s iPod. Writes Carr: “The iPod upped the performance stakes immensely. By using a tiny hard drive to store music, it allowed people to carry hundreds, even thousands, of songs with them at all times. Its price, starting at $399, was equally eye-opening — the price of a mid-range component stereo system.”
Good point.
The article definitely make you think that there is some benefit (profit) to providing high-end products. So why are so few companies doing it?
Because to compete on quality is much more difficult than competing on cost. For one, it takes imagination. And even more important, it takes execution. And that takes good leadership. Would Apple be succeeding without Jobs? Look what happened to Apple when they had that guy from Pepsi running it. Almost destoyed the company.
So it’s not that easy. But top-down innovation can be done. The question is: can it be sustained?

Ethanol versus Exxon: Wake Up!


Biofuels: Think Outside The Barrel
Vinod Khosla is a venture capitalist considered one of the most successful and influential personalities in Silicon Valley. He was one of the co-founders of Sun Microsystems and became a general partner of the venture capital firm Kleiner, Perkins, Caufield & Byers in 1986. In 2004 he formed Khosla Ventures.
Listen to his presentation to the nerds at Google, and you start getting mad at our politicians and oil-businesses.
Why can’t we do this? Because Exxon doesn’t want to. Listen, even the CIA wants to do this. I don’t often agree with those guys, but the facts are simple. Watch the video and call your congresswoman.
In Brazil, VW is debating whether they even need to manufacture “gas-only” cars anymore. Wake up, America. We can create some real wealth in the Mid-West instead of funding the Saudis.

USA Today: IDEO, The Deans of Design

IDEO is all about experiential approaches. Its designers try to see and sense the world by getting inside the heads of their fellow human consumers. The firm-a dream come true for the concerned parents of liberal arts majors everywhere-employs anthropologists, cognitive psychologists, and sociologists, among other right-brain thinkers, to create, improve, or reimagine all manner of products, services, work spaces, and business systems. “It’s a very human-centered process,” says Tom Kelley, the firm’s general manager and brother of founder David Kelley. “Others approach a problem from the point of view that says, ‘We have the smartest people in the world; therefore, we can think this through.’ We approach it from the point of view that the answer is out there, hidden in plain sight, so let’s go observe human behavior and see where the opportunities are.” – from this article in USA Today
What a novel idea.
How come no one in the auto industry gets this?

How Software Platforms Revolutionize Business

From HBSWK
“You can’t see them, but we’ve all used “software platforms” over the last few decades, whether they are embedded in the Windows operating system, a cell phone, or game machine. In a new book, the authors term software platforms “invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century.”
“Think of software platforms as ring leaders of ecosystems in which a few or many companies can participate to reach users. These core products, like Windows, for example, offer software services that can be used as the basis for independent developers to build new features. The cell phone has become a lucrative platform for more than handset makers—also in on the party are makers of digital cameras, music services, and organizer software.
“Not only are existing industries being transformed and sometimes toppled by software platforms, but new industries are also springing up around them; witness the multibillion-dollar ringtone business.”
Yup. Read the article here >>
It’s all about building digital business platforms

Von Hippel: Democratizing Innovation

I meant to do this quite some time ago, but it slipped my mind (like most things). So here it is: a free download of Democratizing Innovation by MIT’s Eric Von Hippel.
The table of contents:
1 Introduction and Overview
2 Development of Products by Lead Users
3 Why Many Users Want Custom Products
4 Users’ Innovate-or-Buy Decisions
5 Users’ Low-Cost Innovation Niches
6 Why Users Often Freely Reveal Their Innovations
7 Innovation Communities
8 Adapting Policy to User Innovation
9 Democratizing Innovation
10 Application: Searching for Lead User Innovations
11 Application: Toolkits for User Innovation and Custom Design
12 Linking User Innovation to Other Phenomena and Fields
Here’s why I keep going back to this book:
Firms can make a profitable business from identifying and mass producing user-developed innovations or developing and building new products based on ideas drawn from such innovations. They can gain advantages over competitors by learning to do this better than other manufacturers. They may, for example, learn to identify commercially promising user innovations more effectively that other firms. Firms using lead user search techniques … are beginning to do this systematically rather than accidentally—surely an improvement. Effectively transferring user-developed innovations to mass manufacture is seldom as simple as producing a product based on a design by a single lead user. Often, a manufacturer combines features developed by several independent lead users to create an attractive commercial offering. This is a skill that a company can learn better than others in order to gain a competitive advantage.”

Another (Hot) Summer Gone

And what have we learned?
I took some time off the blog to focus on some off-line activities like working on my book on Double Loop Marketing. Must say I’m having fun working on it. And like all good research projects, I just have more questions.
I’ll be presenting some of my thoughts at a Penn State ISBM webinar on Double Loop Marketing later this year, so stay tuned.
I also did some travelling and learned that it’s time for Europe to get some basic summer necessities like A/C and ice.
Why is it that European restaurants give you two tiny cubes of ice when you ask them for ice in your drink?
I’m also learning that we are running out of snow-capped mountains – both in Europe and in the States. This global-warming stuff is going to eat our lunch. Which brings me back to air-conditioning. Why are the Europeans so averse to A/C? The Germans, and the French seem to be competing against each other: who can withstand higher temperatures without A/C?
There seems to be a perfect market for a low-cost, portable, one-room A/C unit, priced under € 200. Can it be done? And who’s going to do it? I’m betting an Eastern European immigrant will figure this out and become the next German (or French) billionaire.
Oh well. Thanks to everyone for the e-mails and inquiries while I was out. I will be getting back to you all over the next two weeks.
It’s good to be blogging again. And maybe I’ll even have something halfway intelligent to say in my next post!

The Meaning-Driven Business

Does your business have meaning? A purpose beyond the purpose of making money?
See Guy Kawasaki’s “Art of the Start” clip below (hat-tip to Dominic Basulto from businessinnovationinsider.com)

Funny thing – we must find a way to do what we love, or we are wasting our lives:
Dr. K. Anders Ericsson’s research on performance suggests that when it comes to choosing a life path, you should do what you love — because if you don’t love it, you are unlikely to work hard enough to get very good. Most people naturally don’t like to do things they aren’t “good” at. So they often give up, telling themselves they simply don’t possess the talent for math or skiing or the violin. But what they really lack is the desire to be good and to undertake the deliberate practice that would make them better…
– from the NYTimes article by the Freakonomics nerds – read the article at soccer blog >>

The World’s Most Innovative Companies

The Boston Consulting Group and BusinessWeek tell us that these are the 100 most innovative companies in the world:
Rank Company
1 Apple
2 Google
3 3M
4 Toyota
5 Microsoft
6 General Electric
7 Procter & Gamble
8 Nokia
9 Starbucks
10 IBM
11 Virgin
12 Samsung
13 Sony
14 Dell
15 IDEO
16 BMW
17 Intel
18 eBay
19 IKEA
20 Wal-Mart
21 Amazon
22 Target
23 Honda
24 Research In Motion
25 Southwest
26 Porsche
27 Genentech
28 Cisco
29 Nike
30 Motorola
31 DaimlerChrysler
32 Infosys
33 Ryanair
34 Pixar
35 SonyEricsson
36 Whole Foods
37 Capital One
38 Tesco
39 Danone
40 BP
41 PepsiCo
42 Hewlett Packard
43 Disney
44 jetBlue
45 W.L. Gore & Associates
46 Skype Technologies
47 FedEx
48 Bang & Olufsen
49 Renault
50 L’Oreal
51 ExxonMobil
52 Siemens
53 Johnson & Johnson
54 Shell
55 Pfizer
56 Singapore Airlines
57 Nissan
58 DuPont
59 Zara
60 TiVo
61 Yahoo!
62 Macquarie Bank
63 Audi
64 Harley Davidson
65 Progressive Insurance
66 Volvo
67 Philips Electronics
68 ING Bank
69 Nestle
70 Boeing
71 Matsushita Electric Industrial
72 easyJet
73 UPS
74 Coca-Cola
75 Cirque du Soleil (tied)
75 McKinsey (tied)
75 Woolworths (tied)
78 Hutchison Telecommunications
79 Salesforce.com
80 ACS
81 ITC
82 Time Warner
83 Danaher
84 Costco Wholesale
85 LG Electronics
86 bankinter
87 Amgen
88 Caterpillar
89 Accenture
90 SAP
91 SK Telecom
92 Home Depot
93 LVMH
94 Gap
95 Unilever
96 Goldman Sachs
97 John Deere & Co.
98 Whirlpool
99 Entel
100 McDonald’s
To me this makes no sense. This is in fact a list of the world’s most innovative dinosaurs. Massive companies which are still able to create value using new ideas. But these companies (w/ the exception of IDEO and a few others) are NOT at the forefront of innovation. Rather, that honor belongs to small companies, often at the periphery, which introduce the dinosaurs to these innovations.
Furthermore, innovation is relative, and needs to be measured in the industry or marketspace of the company. IDEO is more innovative than McDonald’s in absolute terms, but what really matters is how innovative McDonald’s is against its competitors.
What I enjoyed was the cover story:
Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Most important, as the Internet and globalization widen the pool of new ideas, it’s about selecting and executing the right ideas and bringing them to market in record time.
In the 1990s, innovation was about technology and control of quality and cost. Today, it’s about taking corporate organizations built for efficiency and rewiring them for creativity and growth. “There are a lot of different things that fall under the rubric of innovation,” says Vijay Govindarajan, a professor at Dartmouth College’s Tuck School of Business and author of Ten Rules for Strategic Innovators: From Idea to Execution. “Innovation does not have to have anything to do with technology.”

Here’s an article from Tom Davenport on the types of innovation. I think it helps make the point that product innovation is just one type of innovation.
Another great insight comes to us from John Hagel, who talks about the limits of western thinking in his critique of Gary Hamel‘s latest thinking. Hagel tells us to focus on understanding the continuous management innovations across enterprises that are emerging in Asia.
Question: How does one link innovation to brand? to shareholder value? to sustainability? Branding, design, eco-imagination. They’re all linked…

The Community Trap: Joga.com vs. SoccerBlog.com

At first glance I have no chance.
How can my puny soccerblog.com site take on the likes of Joga.com from Nike + Google?
Answer: It doesn’t have to.
Joga.com from Nike + Google is too commercial, period. So it’s no contest.
Communities have to be open – in spirit and intent. They cannot exclude players, teams, or participants. I’m sure Nike + Google will learn. Until then, I’m having fun!
John Hagel: Joga.com and the Return of Community
William Dunk’s Global Province: Agile Companies #281

Rules for Innovators?

From the Talentism blog, a great list for wanna-be innovators:
(1) Innovation starts with “And”
(2) Not Just Smart, But Always Focused
(3) Make Sure You Have the “No But” Critic in the Room
(4) Build Crappy Prototypes Fast
(5) Don’t Listen To Customers, Watch Them
(6) If It’s Right, Change It
(7) Sell it Like you Play It
(8) Iterate ‘Till You Drop
(9) Appoint One Person Bad Cop and Follow Their Command
(10) Innovation Is About Learning, not Genius
Here’s one more:
(11) Constancy of Purpose!

Doug Smith on Brand Delivery

Writes Doug Smith on his blog:
“…brand is the upshot of three related human actions: promising, delivering and experiencing. Employees (a category that includes executives) promise and deliver. Customers (and investors who are not actively involved in companies) experience. Most of us have yet to catch up with the latter two of these activities: delivery and experience. Because we are bombarded with logos and symbols and promises, we tend too rarely to look beyond the promising to the delivery and experience.
“That is, until the experience is entirely out of line with the promise.”
Read the post to get what “brand delivery” really means. Smith also gives us an example – FOX vs. WaPo – guess which one has a consistent brand delivery…

The BBC as a Global Online Brand

“The BBC is both an entrepreneurial anomaly and an illustration of the importance of branding on the internet. It has received considerable financial backing – from a government- mandated licence fee rather than venture capitalists. But its growth stems mostly from the reputation the BBC has earned through its old-media activities in radio and television.” writes the FT.
Darn right. The BBC has done what Rupert Murdoch could not (and would not) – it has become the online brand for trusted news, blowing away the pathetic efforts of the CBS, ABC, NBC, and FOX.
Why? Because the BBC is truly more fair and balanced. And it has something no American network has- constancy of purpose.
Read the article >>
PS- The other global British success story is the good old Economist.

The Idea Ecosystem

How’s this for an idea –
“An internal market where any employee can propose that the company acquire a new technology, enter a new business or make an efficiency improvement. These proposals become stocks, complete with ticker symbols, discussion lists and e-mail alerts. Employees buy or sell the stocks, and prices change to reflect the sentiments of the company’s engineers, computer scientists and project managers – as well as its marketers, accountants and even the receptionist.”
Idea marketplaces are happening now at Rite-Solutions and InnoCentive, according to Here’s an idea: Let everyone have ideas, an article in the IHT:
The next frontier is to tap the quiet genius that exists outside organizations – to attract innovations from people who are prepared to work with a company, even if they don’t work for it. An intriguing case in point is InnoCentive, a virtual research and development lab through which major corporations invite scientists and engineers worldwide to contribute ideas and solve problems they haven’t been able to crack themselves.
InnoCentive, based in Andover, Mass., is literally a marketplace of ideas. It has signed up more than 30 blue-chip companies, including Procter & Gamble, Boeing and DuPont, whose research labs are groaning under the weight of unsolved problems and unfinished projects. It has also signed up more than 90,000 biologists, chemists and other professionals from more than 175 countries. These “solvers” compete to meet thorny technical challenges posted by “seeker” companies. Each challenge has a detailed scientific description, a deadline and an award, which can run as high as $100,000.
“We are talking about the democratization of science,” said Alpheus Bingham, who spent 28 years as a scientist and senior research executive at Eli Lilly & Company before becoming the president and chief executive of InnoCentive. “What happens when you open your company to thousands and thousands of minds, each of them with a totally different set of life experiences?”
InnoCentive, founded as an independent start-up by Lilly in 2001, has an impressive record. It can point to a long list of valuable scientific ideas that have arrived, with surprising speed, from faraway places. In addition to the United States, the top countries for solvers are China, India and Russia.

It’s all about your company’s innovation ecosystem. Do you have one? How do you build one? How do you participate in the ecosystem which exists already?

Branding in Asia: Interview with Martin Roll

I recently interviewed Martin Roll, the founder and CEO of VentureRepublic, a leading strategic advisory firm out of Singapore. Roll is the author of the ground-breaking bestseller Asian Brand Strategy: How Asia Builds Strong Brands.
Here are his 10 steps to building an Asian brand:
1. The CEO needs to lead the brand strategy work
2. Build your own model, as not every model suits all
3. Involve your stakeholders including the customers
4. Advance the corporate vision
5. Exploit new technology
6. Empower people to become brand ambassadors
7. Create the right delivery system
8. Communicate!
9. Measure the brand performance
10. Adjust relentlessly and be ready to raise your own bar all the times
For details, read the interview at the Zyman Institute of Brand Science website >>

Soccer Blog: The Start of Something

Well, I’m just doing it.
After years of talking and discussion- our soccer blog is finally launched. We have 8 contributors signed up from various parts of the world.
Let me know if you’re interested in contributing. Prerequisite: you must know who Edson Arantes do Nascimento is!

Bratz vs. Barbie: The Power of Strategic Innovation

In her book – The Power of the Purse: How Smart Businesses Are Adapting to the World’s Most Important Consumers – Women, Fara Warner describes how the MGA’s Bratz line of brash, but fashionable, dolls toppled Mattel’s Barbie — by focusing on consumer behavior.

Says Warner:
– Don’t allow personal history or preconceived ideas of women — in this case, young girls — to overshadow insight from consumers.
– Read, listen, and respond to correspondence from consumers — not their parents. MGA used this strategy to create a line of boy Bratz.
– Consider the consumers’ whole world, not just the time when they are using the product. This strategy was used to expand Bratz beyond dolls and clothes.
– Move with consumer trends, not industry timelines. MGA creates new clothing lines for its dolls every three to six months, not just once a year.
Read this chapter — Toppling Barbie: Bratz Predict the Future — from her book.
The Bratz example serves as a powerful reminder that companies like Mattel cannot afford to rest on their laurels, but need to selectively forget the past, as Vijay Govindarajan would say.
Fara has also started a blog. Her introductory post is here.
Maybe there’s a place for an environmental girl doll one of these days — perhaps a Jane Goodall do-good activist doll? I mean why do toy companies focus on girls, malls and fashion? All right, I know the answer… it was a rhetorical question.

Nicholas Carr: The Editor beats the Wisdom of the Crowd

Nicholas “IT Doesn’t Matter” Carr talks about human editors versus algorithms in his post, “The editor and the crowd“:
“As the comparison of Memeorandum and Slashdot shows, the software-mediated crowd is a poor replacement for a living, breathing, thinking editor. But there are other things that the crowd is quite good at. The crowd tends, for instance, to be much better than any of its members at predicting an uncertain future result that is influenced by many variables. That’s why stock market indexes beat individual money managers over the long run. It’s easy to understand why. First, there are limits to the ability of any single individual to understand the complexities in how a large number of variables change and influence one another over time. Second, every individual’s thinking is subject to idiosyncracies and biases – some conscious, some not. The crowd aggregates all individuals’ knowledge about variables while balancing out their personal biases and idiosyncracies. It’s not the “wisdom” of crowds that makes crowds useful, in other words; it’s their fundamental mindlessness. What crowds are good for is producing average results that are not subject to the biases and other quirks of human minds.”
and
“That’s also why search engines work pretty well with algorithms (until, at least, they begin to be gamed by individuals using their minds): They produce the result that best suits what the average searcher is looking for. You don’t want generally used search engines to reflect individual biases. Indeed, one of their main jobs is to filter out those biases – and revert to the average.”
But, says Carr:
“But that’s also why algorithms don’t work very well as editors. With an editor, you don’t want mindlessness; you want mindfulness. A good editor combines an understanding of what the audience wants with a healthy respect for the idiosyncracies of his own mind and the minds of others. A good editor doesn’t aim to provide a bland “average result”; he wants to wander widely around the average, at times even to strike out in the opposite direction altogether. The mindless crowd filters out personality along with idiosyncracy and bias. The mindful editor is all about personality.”
I couldn’t agree with Carr more. And that’s why one of my latest projects is 100% human powered; powered by personality. I could have used software and algorithms to do the heavy lifting, but decided in favor of people. Thanks Nick!

Chris Trimble: Building Innovation Ecosystems

The rate at which new ideas are generated is directly related to the effort invested in enriching social networks.
Says Chris Trimble in his Fast Company column:
“Entrepreneurs believe in the power of networking. Many are very good at it. They become good because they recognize that most people with interesting notions usually have only one piece of a puzzle. Often unexpected combinations of ideas, or chance meetings of people with complimentary perspectives, ignite genuine breakthroughs.
“Aspiring innovators from large companies are handicapped in the networking game — not because they lack skill, but because of the nature of their jobs. Once a business is proven and profitable, the name of the game is to make operations as efficient as possible. Employees at all levels are pulled into ever more specialized roles. Repeated tasks are joined together by rigorously documented processes. As a result, each manager’s web of connections increasingly mirrors the way today’s work is organized. Most connections are with managers with closely related specialties, who share similar perspectives, shaped by the demands of the same customers.”
There is one other point Chris – I call it the “closing of the corporate mind”. It’s not just about people being comforatble with the status quo. It’s about people hiring and surrounding themselves with their own kind. A tribal thing, perhaps? So the desis hang out with the desis, the Chinese with the Chinese, the Hicks with the Hicks, the golf-playing execs with other golf-playing execs, repugs with repugs, etc.
And as your colleague VG says, travel!
Trimble also mentions the “vast differences between communication networks and trust networks. Communication networks are the kind that are useful at the front-end of the innovation process because they enable the sharing of ideas. The back-end of the innovation process depends on trust networks, which require much heavier investments in time, energy, and goodwill.
Still boils down to people and trust, people! Put a value on that Mr. CFO Bean-Counter!

Building a Digital Business Platform

For over five years now I’ve been working on the problem of how companies can build a community for prospective customers. The question I asked myself was:
How can we get customers to collaborate with the company/companies to co-create products and services that benefit everyone involved?
I had some long discussions on this with John Hagel and the late John Rheinfrank. Here’s what we were thinking:

[click to enlarge]
Any suggestions?