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 >>

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.

The Time is Now for “Narrowcasting”

According to the NYTimes:
“In the last six months, major media companies have received much attention for starting to move their own programming online, whether downloads for video iPods or streaming programs that can be watched over high-speed Internet connections.
“Perhaps more interesting — and, arguably, more important — are the thousands of producers whose programming would never make it into prime time but who have very dedicated small audiences. It’s a phenomenon that could be called slivercasting.
The web has always been a narrowcasting medium.
More from the article:
Discovery Communications, which has been a master of the current system, creating 15 different cable channels including Animal Planet and Discovery Health, is now exploring even more specialized services over the Internet. One will be introduced tomorrow for $9.95 a month. It will offer 30,000 video clips excerpted from its library of documentaries and other educational programs to help grade school and high school students with their homework. In the future, other services will offer content focused on narrow topics in travel, science and health.
Discovery, Mr. Hendricks says, is in a good position to create such services because of its large archive. “We have a wealth of programming just related to cancer, just related to Alaska and so on,” he said.
In addition to offering Internet distribution, Discovery will start to broadcast some of these programs late at night on its regular channels and encourage people to record them, he said.
To be sure, there are doubters. “I’ve never been a believer that we should create channels for all these niches like beach volleyball,” said John Skipper, a senior vice president of ESPN, a unit of the Walt Disney Company. “They just don’t pencil out. Because if you have 12,000 people, you can’t afford to do it. And if you can’t afford to do it, you can’t make any money on it.”
One reason that ESPN has shied away from this sort of niche programming, he said, is that its brand stands for a level of high-quality visual production that would be difficult for small channels to afford. Indeed, ESPN has been investing millions of dollars to produce programs in high-definition formats.
But reticence by some big media companies is making room for independent programmers to explore all sorts of niches.

Hmmm. ESPN doesn’t get it… perhaps Steve Jobs will wake them up.
Here’s the article in full>>

Carr’s Sixth Force: Public Interest (Are you listening, Wal-Mart?)

Since we’ve been talking about Wal-Mart this week, I figured we should look at the big picture. Nicholas Carr’s article on the 6th force (take that, Michael Porter!) is a good start:
“What’s the greatest strategic challenge facing Wal-Mart today? It’s not competition from other retailers. Although the world’s biggest merchant certainly keeps a close eye on rivals like Target and Best Buy, its domination of the industry seems secure for the time being. It’s not pressure from suppliers. Wal-Mart has most makers of consumer packaged goods at its beck and call. And it isn’t the whims of buyers. Shoppers show little desire to abandon their favorite store and its dirt-cheap prices.
No, Wal-Mart’s biggest worry today is the public interest.”
Great insight:
“As the experiences of Wal-Mart and other companies reveal, this traditional approach ignores the changing nature of the public interest and its expanding influence over companies’ financial results. The public does not want a company’s charity. It wants a chunk of its profits. The public interest, in other words, now expresses itself as an economic interest — the public has become an active competitor in the struggle to seize the bounties of the marketplace. As a result, the way businesses think about strategy needs to change. If a company clings to the old assumptions, it may be putting its future at risk.”
I don’t think the public wants “a chunk of its profits” tho; I think the public wants businesses to be fair- fair to the community and country it is in. Think economic justice. Not just social justice.
Read Carr’s essay >>
PS – Does your company have an active ecoimagination?

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!

Googlespace vs. Microsoft: Will they call it G-office?

Here we go. Says Red Herring:
“In an overt challenge to Microsoft, search giant Google said Thursday it had acquired Writely, an online word processing tool, for an undisclosed amount.
“Writely, a project of Upstartle, functions much like Microsoft Word but in a web browser. The online environment allows for collaboration between multiple authors and the benefit of someone else hosting your document.”
I wrote about this a while back… wonder why is Microsoft just sitting there milking dead cows like Office?
Marc Benioff of salesforce.com says: “It demonstrates that on demand is the death knell of Microsoft. Google is firing a shot directly into the heart of Microsoft Office.”
What can you do with Writely?
According to the website:
You can:
– Upload Word documents, OpenOffice, RTF, HTML or text (or create documents from scratch).
– Use our simple WYSIWYG editor to format your documents, spell-check them, etc.
– Invite others to share your documents (by e-mail address).
– Edit documents online with whomever you choose.
– View your documents’ revision history and roll back to any version.
– Publish documents online to the world, or to just who you choose.
– Download documents to your desktop as Word, OpenOffice, RTF, PDF*, HTML or zip.
– Post your documents to your blog.
The next question is: will it be free? ad-supported? free basic, paid premium-version??
C’mon Gates. You know what to do. Just kill Office, now- before Google kills it for you.

The Innovation Mindset: A Checklist

David Maister asks:
How well does your firm stack up against these behaviors and states of mind?
– New challenges are eagerly, continuously sought out.
– The firm and its people never rely on momentum for their success, but are always seeking to build new capabilities.
– Compared to key competitors, the people in the firm are distinguished by a superior, burning passion to get somewhere new.
– The firm emphasizes and requires adaptability, flexibility, and responsiveness as key virtues.
– The firm’s strategies are created through continued and repeated experimentation.
– The firm is markedly superior in creating (not just hiring for) energy, excitement, enthusiasm, drive, determination, passion, and ambition.
– Service offerings, locations, and operating units are repeatedly assessed against the three key criteria: Do the people in the firm find this exciting? Are we making money? Are we doing something special that others are not doing?
– There is a restless refusal to accept “It’s OK.” People never settle, never give up, never coast.
– The firm sustains energy and investment actions both when things have gone badly and when things are going relatively well.
– The firm does not judge its performance by the levels of its accomplishments, but by the “relative incline”: whether or not it is improving relative to competitors on the characteristics it has chosen to compete on.
– Management is held accountable for its ability to create and sustain drive, enthusiasm, passion, ambition, commitment, and excitement, and instills these things in the individual members and groups that make up the organization. Managers who cannot do this are replaced.
Be honest! Read the entire article: “It’s Not How Good You Are, It’s How Much You Want It” >>

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?

Open Source Collaboration: The Flu Wiki

The purpose of the Flu Wiki is to help local communities prepare for and perhaps cope with a possible influenza pandemic. This is a task previously ceded to local, state and national governmental public health agencies. Our goal is to be:
– a reliable source of information, as neutral as possible, about important facts useful for a public health approach to pandemic influenza
– a venue for anticipating the vast range of problems that may arise if a pandemic does occur
– a venue for thinking about implementable solutions to foreseeable problems
This is how the Internet is democratizing society… collaborative problem-solving in public health. Public health is too important to leave to the bureaucrats… Remember Katrina?
See their avian influenza outbreak maps.
This level of detailed information is what we want from our public institutions, but you can bet we won’t get it- for several reasons- political, economic, and sadly, policy.

Weep, Deming, Weep: Why US Automakers Can’t Learn

Is Deming crying?
It seems like the US Auto industry is intent on destroying itself. See for example, Doug Smith’s “Removing The Deck Chairs From The Titanic”. Smith says:
“GM still doesn’t ‘get it’ when it comes to the value side of it’s products. As previously noted, GM invested heavily in product design and manufacturing flexibility — that is, the capacity to move quicker to provide new products. It can now bring 15 new products to market quicker than ever before. And, what are the deck chair managers doing with this flexibility. 13 of the new products will be re-designs of full size SUVS.”
Aaargh…
What is wrong with these people? What happened to Deming’s 14 points? It was Deming who said: “If you want to ruin a company, send it American management”
So what’s going on? IndustryWeek‘s John Teresko talks about the Toyota Way, and asks two questions:
1) How does Japan’s leading automaker keep getting better?
2) What keeps competitors from emulating that performance?
While U.S. manufacturers in many sectors have used practices from the Toyota Production System (TPS) to boost performance substantially since the mid-’80s, they have used it improperly, experts say. Instead of embracing TPS as an overarching philosophy, they have used it piecemeal as a toolbox. These companies’ leaders must revive their strategies to mimic Toyota’s in order to compete, which means reversing the popular notion that lean and other TPS-derived concepts are tools to be used selectively to achieve departmental milestones.
Read the whole thing. Look for this fun quote: “cost reduction is not a strategy unless you want to commoditize or go out of business.”
P.S.- For those of you who have forgotten Deming, here are his 14 points:
1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company (see Ch. 3).
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
– Eliminate work standards (quotas) on the factory floor. Substitute leadership.
– Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

Who Won the Superbowl Ad Contest? Let the Brains Decide…

So who won this year’s Superbowl ad-wars?
This year, at the UCLA Ahmanson-Lovelace Brain Mapping Center (don’t you love that name), Marco Iacoboni and his group used functional magnetic resonance imaging (fMRI) to measure brain responses in a group of subjects while they watched the Super Bowl ads. The way fMRI works is relatively simple: different levels of cerebral blood oxygenation have different magnetic properties. Moreover, changes in blood oxygenation correlate with changes in neural activity. Thus, without using any contrast agent, fMRI can measure how much brain areas are activated during sensory, cognitive and motor experiences.

According to the brain-waves, “the overwhelming winner among the Super Bowl ads is the Disney – NFL ‘I am going to Disney’ ad. The Disney ad elicited strong responses in orbito-frontal cortex and ventral striatum, two brain regions associated with processing of rewards. Also, the Disney ad induced robust responses in mirror neuron areas, indicating identification and empathy. Further, the circuit for cognitive control, encompassing anterior cingulate cortex and dorsolateral prefrontal cortex, was highly active while watching the Disney ad. We consider all these features positive markers of brain responses to the ad. In second place, the Sierra Mist ad, activated the same brain regions but less so than the Disney ad.”
Great. Disney? Give me a break. That said, I know someone (a famous business guru) who is visiting Disney this week, so maybe the ad worked after all!
Here’s the one I picked as the winner. (Doug Smith agrees!) >>

Anyway, read all about the brain wave theory of advertising effectiveness here >>

Gary Hamel on Management Innovation

Gary Hamel’s back. This time he’s looking at “management innovation” in his latest HBR article titled – “The Why, What, and How of Management Innovation.”
A management innovation, says Gary Hamel, creates long-lasting advantage when it meets at least one of three conditions:
1. It is based on a novel principle that challenges the orthodoxy
2. it is systemic, involving a range of processes and methods
3. it is part of a program of invention, where progress compounds over time
Few companies have been able to come up with a formal process for fostering management innovation, says Hamel. The biggest challenge seems to be generating truly unique ideas. (No duh!)
Hamel gives us three examples of management innovation:
1. Harnessing employee intellect at Toyota.
2. Building a community at Whole Foods.
3. Growing great leaders at GE.
This time Hamel doesn’t mention Enron… (like he did in his first edition of Leading the Revolution) 🙂
So what is management innovation?
A management innovation can be defined as a marked departure from traditional management principles, processes, and practices or a departure from customary organizational forms that significantly alters the way the work of management is performed. Put simply, management innovation changes how managers do what they do.
And what do managers do? According to Hamel, managerial work includes:
• Setting goals and laying out plans
• Motivating and aligning effort
• Coordinating and controlling activities
• Accumulating and allocating resources
• Acquiring and applying knowledge
• Building and nurturing relationships
• Identifying and developing talent
• Understanding and balancing the demands of outside constituencies
Says Hamel:
“In a big organization, the only way to change how managers work is to reinvent the processes that govern that work. Management processes such as strategic planning, capital budgeting, project management, hiring and promotion, employee assessment, executive development, internal communications, and knowledge management are the gears that turn management principles into everyday practices. They establish the recipes and rituals that govern the work of managers. While operational innovation focuses on a company’s business processes (procurement, logistics, customer support, and so on), management innovation targets a company’s management processes.”
And:
“A systematic process for producing bold management breakthroughs must include:
1. Commitment to a big management problem
2. Novel principles that illuminate new approaches
3. A deconstruction of management orthodoxies
4. Analogies from atypical organizations that redefine what’s possible”
Not too bad, eh? But how does one get managers to overcome their fear of failure? Most leaders in the Fortune 500 did not get to the oxygen-deprived board room on their talent for risk taking. I feel most got there for NOT taking risks, but rather for simply obeying orders and executing well on given tasks. Hamel does not address this problem, which I believe plagues all (ok, 99%) large companies.
While Hamel looks for management innovation, I’m still looking for innovative managers (now that’s an oxymoron).
Still, this is an article worth reading twice. And Hamel is back. I can’t wait to read the “forthcoming book.”
Almost forgot, Hamel also gives us a toolkit (a powerpoint slide set) you can download here >>
One last thing:
Hamel lists a dozen of the most noteworthy management innovations from 1900 to 2000.
1. Scientific management (time and motion studies)
2. Cost accounting and variance analysis
3. The commercial research laboratory (the industrialization of science)
4. ROI analysis and capital budgeting
5. Brand management
6. Large-scale project management
7. Divisionalization
8. Leadership development
9. Industry consortia (multicompany collaborative structures)
10. Radical decentralization (self-organization)
11. Formalized strategic analysis
12. Employee-driven problem solving
Adds Hamel:
“Losing out are Skunk Works, account management, business process reengineering, and employee stock ownership plans. There are more recent innovations that appear quite promising, such as knowledge management, open source development, and internal markets, but it’s too early to assess their lasting impact on the practice of management.”

The Intelligent Economy: The Business Analytics Blog

Britton Manasco and I have just launched a new blog on business intelligence, analytics & performance. We’ve both been toying w/ the idea for some time (over a year, in my case) and the time seems right to go for it.
We’ve named the blog “Intelligent Economy” because that’s what this movement is about.
When I took a sabbatical many years ago to teach Math to highschool kids, I used to think “Mathematics is God’s language.” Now, increasingly, it is also the language of business.
Britton’s done a great job explaining the context in his post “Friends, Romans, Catalysts, Lend Us Your Ears – and Your Minds.”
I think it’s going to be a fun journey. And if you’ve got some brilliant analytical research you need to share with the rest of the, drop us a line.

Stupid Research: The Importance of Being Pretty

Here we go again. Wired has a story on The Importance of Being Pretty.
They’re talking about your website.
Says Wired: “Internet users can give websites a thumbs up or thumbs down in less than the blink of an eye, according to a study by Canadian researchers. In just a brief one-twentieth of a second — less than half the time it takes to blink — people make aesthetic judgments that influence the rest of their experience with an internet site.”
The study in question comes to us from Dr. Gitte Lindgaard, a psychology professor at Carleton University in Ottawa. She’s the “NSERC/Cognos Industrial Research Chair in User-Centred Design” at Carleton.
No one mentions the report title, but I believe it’s this one: “Attention web designers: you have 50 milliseconds to make a good first impression”, Behaviour & Information Technology, 25, 115-126, Lindgaard, G., Dudek, C., Fernandes, G. & Brown, J., 2005.
In the study, researchers discovered that people could rate the visual appeal of sites after seeing them for just one-twentieth of a second. These judgments were not random, the researchers found — sites that were flashed up twice were given similar ratings both times.
“Unless the first impression is favorable, visitors will be out of your site before they even know that you might be offering more than your competitors,” said Lindegaard.
But the results did not show how to win a positive reaction from users, admitted Lindgaard. “When we looked at the websites that we tested, there is really nothing there that tells us what leads to dislike or to like.”
And while further research may offer more clues, she said the vagaries of personal taste would always be a limiting factor. “If design were reducible to a set of principles, wouldn’t we find an awful lot of similar houses, gardens, cars, rooms?” said Lindgaard. “You’d have no variety.”
This study is just another example of lab-myopia. It’s dangerous. And detrimental to real-world business performance. Lindgaard doesn’t get it.
The real question is: how many people who come to your website do something you want them to do – buy something, opt-in, download a whitepaper, join a discussion, etc. The question is NOT if you have a pretty site, but: “How effective is your site?”
I’m not the only one turned off by this type of stupidity:
Gerry McGovern: “It is unquestionably true that people are highly impatient on the Web. However, it is hard to understand how people can get an impression of a website in one twentieth of a second, when most webpages takes several seconds to download. (Laboratory conditions are not the same as real-life conditions.) Function and visual appeal do not have to be in conflict. However, it is clear that the websites that are making the most money are focusing much more on function than visual appeal. What would be the value of asking people to rate the visual appeal of Ryanair.com, Aerlingus.com, eBay.com, or Yahoo? We need to be careful about the questions we ask because they could lead us down the wrong path.
Jakob Nielsen: It’s a dangerous mistake to believe that statistical research is somehow more scientific or credible than insight-based observational research. In fact, most statistical research is less credible than qualitative studies. Design research is not like medical science: ethnography is its closest analogy in traditional fields of science. User interfaces and usability are highly contextual, and their effectiveness depends on a broad understanding of human behavior. Typically, designers must combine and trade-off design guidelines, which requires some understanding of the rationale and principles behind the recommendations. Issues that are so specific that a formula can pinpoint them are usually irrelevant for practical design projects.
Online, form without function is a disaster.
And that’s why I get mad at “lab-researchers” like Lindgaard.

Design Korea: Interview with Lee Kun Pyo

From BusinessWeek:
“Over the past decade, Korea’s Samsung Electronics has transformed itself from a copycat producer of uninspiring goods into one of the world’s top consumer-electronics brands. Much of that transformation is due to a shift in power at the company from engineers to designers. Samsung’s rebirth has inspired other Korean companies to place a greater emphasis on design — in fact, it has energized the country’s design community.”
An interview with Lee Kun Pyo, director of the Human-Centered Interaction Design Laboratory at the Korea Advanced Institute of Science & Technology on the changes sweeping Korean design >>
What I found interesting:
“Koreans traditionally don’t articulate what they’re doing beforehand. They’re very contextual. Of course they do customer research and product planning and user-centered design and so on. But they quickly arrive at solutions, then look at the solution to find any further problems. Some might say that’s unsystematic, but it’s really very dynamic. And it works well for products with a short lifecycle, like mobile phones or MP3 players.”
and
“Things are changing. In the past, product planning was done by marketing people who would choose product concepts by statistics, and engineers would present the structural requirements. The designers always lost the game. But now the head of Samsung’s mobile division asks the designer to make a mockup and throws it to the engineer and says, “Make it.” The opportunity has been handed over to the designers.”
and
“Korea has 230 design schools — more than America.”
hmmm…

Social Networking: The Strength of Internet Ties

The internet helps maintain people’s social networks, and connects them to members of their social network when they need help. 60 million Americans have turned to the internet for help with major life decisions. These are the findings of a new report from the Pew Internet & American Life Project.
Summary of findings:
1. The internet helps build social capital.
2. The internet plays socially beneficial roles in a world moving towards “networked individualism.”
3. Email allows people to get help from their social networks and the web lets them gather information and find support and information as they face important decisions.
4. The internet supports social networks.
5. Email is more capable than in-person or phone communication of facilitating regular contact with large networks.
6. Email is a tool of “glocalization.” It connects distant friends and relatives, yet it also connects those who live nearby.
7. Email does not seduce people away from in-person and phone contact.
8. People use the internet to put their social networks into motion when they need help with important issues in their lives.
9. The internet’s role is important in explaining the greater likelihood of online users getting help as compared to non-users.
10. Americans’ use of a range of information technologies smooths their paths to getting help. Those with many significant ties and access to people with a variety of different occupations are more likely to get help from their networks.
11. Internet users have somewhat larger social networks than non-users. The median size of an American’s network of core and significant ties is 35. For internet users, the median network size is 37; for non-users it is 30.
12. About 60 million Americans say the internet has played an important or crucial role in helping them deal with at least one major life decision in the past two years.
13. The number of Americans relying on the internet for major life decisions has increased by one-third since 2002.
14. At major moments, some people say the internet helps them connect with other people and experts who help them make choices. Others say that the web helps them get information and compare options as they face decisions.
Source: Jeffrey Boase, John B. Horrigan, Barry Wellman, Barry, and Lee Rainie. The Strength of Internet Ties. Washington, DC: Pew Internet & American Life Project, January 2006.
Wise companies will look at this report carefully, and figure out ways to use this social power of internetworking.

Execution: Laurence Haughton on the Art of Follow-Through

Laurence Haughton speaks softly, but his message comes through loud and clear:
Fact 1: 1/2 of all a company’s strategies and initiatives will fail to make it from the drawing board to the front lines
Fact 2: Because 2/3 of all managers follow through using tactics prone to fail
Fact 3: And only 1 out of 10 companies have the tools to address this critical breakdown
A management consultant, lecturer, and business writer, Haughton’s latest book, It’s Not What You Say… It’s What You Do – How Following Through at Every Level Can Make or Break Your Company was published by Doubleday in 2005.
In 2001 Haughton co-authored It’s Not the Big that Eat the Small… It’s the FAST that Eat the Slow– a Wall Street Journal, USA Today, and New York Times bestseller that was translated for sale in 26 countries around the world.

Here’s the interview I’ve been promising to post on the site.
What made you write this book?
I wanted to know why half of all initiatives fail, and what leaders at every level can do about it. Of course, I had preconceived notions of what I thought the problems were, but was surprised to find that almost all of them were dead wrong…
Can you give us an example of that?
The biggest preconceived notion I had was that there wasn’t enough accountability in the world, and that why things didn’t get done. I used to think that people didn’t take completing their work seriously or their bosses didn’t make the consequences serious enough.
I have a very high degree of what psychologists would call conscientiousness, which can make me a real pain to be around. So that’s why I thought I got things done, and others didn’t.
So you’re the worrywart for everyone…
Also a nag. I used to look to blame people. I’ve visited companies that work that way, and I’m now convinced that’s dead wrong.
So the concept that all the world needs is accountability and more dire consequences, or the opposite view- a motivationalist view that all you need is more attaboys! Whichever side you want to be on, they’re both wrong.
The key is that you have to find the line between enough and too much accountability. The line is not that hard to find. I lay out a prescription in the book. But it depends on the type of project you’re working on. For example, is it more important that everyone communicates, coordinates and cooperates or is it more important that you know to last scintilla who it is that specifically dropped the ball that caused an interruption. Pinpoint accountability is totally unproductive in certain industries- the airline industry, for example. Research shows us that managers who take accountability too far, especially in businesses where follow through requires rapid responses to unpredictable changes, chip away at each individual’s willingness to look past personal interests and work with others to make sure what’s expected gets done.
In the book you’re saying that execution is critical. And yet you take Larry Bossidy to task.
It was Linda Lockwood at Charles Schwab who lifted the veil from my eyes about the Larry Bossidy’s memo in his book. She’s the one who said it was the “same old corporate gobbledygook.” Bossidy’s memo did not set clear expectations. And Linda wondered aloud: “How could managers tell when they had achieved Bossidy’s objectives?”
I can tell you that woke me up.
Then I started exploring the difficulty that people have when directions aren’t clear.
My book describes 4 building blocks that were developed after research showed us that 66% of managers use tactics that are prone to fail. And the tactics fall under the 4 building blocks I describe in my book. I use the 4 building blocks to make it plain, to explain step-by-step what to watch out for.
It’s so important that you have measurable objectives but even more important, you’ve got to have clarity. It was Einstein who said that if a scientific theory can’t be explained to a child it’s probably worthless.
Think of the stuff that you read – the obtuse language, the jargon – in the marketing world and HR world for example.
The team leader’s job is to make people understand, not confuse them. Not everyone has to be as smart as the leader as Linda pointed out, but everyone has to understand where we’re going as a team.
So let’s talk about the 4 building blocks…
The four building blocks are:
1. Having a clear direction so everyone knows exactly where they’re headed
2. Matching the right people to each goal
3. Getting the right level of buy-in (you have to outmaneuver the CAVE people)
4. Unlocking the individual initiative in every member of the team
Simple enough. But it’s far more complicated than you’d expect.
The first building block is clear direction that says that if you talk to people, more that half the time people can’t see a connection between what they’re doing and what the corporate objectives are. Why cant; they. It starts with the fact that as leaders, as managers we’re not clear. Sometimes we’re trained to say things in a vague and general way instead of doing what Douglas Smith says- make success measurable. Be specific, have some idea about how you measure the results you want and how the accountability gets divided in the team. To begin, just ask yourself- “is what I told them to do measurable, is it specific enough?”
In the book I describe the executive who is told by a 16 year old kid that “sometimes it seems like you’re writing to impress yourself.”
It’s our job to make sure that what we say makes sense and is understood at every level of the company- by both platinum level players and nickel level players, and everyone in between.
We all need to recognize that we have empathy inside us, and that we can up our ability to empathize. In the book I talk about reading between the lines. Take the world of the high-end restaurant business. A very competitive business, low barriers to entry… so how do you compete? How do you compete with people who are paid $12-15 dollars an hour?
In the book we tell readers about Richard Coraine of the Union Square Hospitality Group in Manhattan. They have created a process of “enlightened hospitality” which I describe as a real-time sixth-sense of their customer’s expectations, followed by an effort to exceed those expectations. Coraine tells us the story of how a reservations person noticed the guest whose valise had a broken grip (he held it under his arm so his client wouldn’t notice). While the guest entertained his client over lunch (at a quiet table selected by the host), the valise is sent around the block and the strap is reattached. When the guest comes to check out, the host hands him the bag by the grip to show him its fixed, without a word being exchanged. That’s “enlightened hospitality.”
The key is to “put yourself in someone’s shoes.” That’s what Coraine has created, a recipe for that includes smarts, heart, and courage. There’s another story he tells us in the book as well, but you’ll have to read it.
You mean the one about “chicken soup and crackers” after midnight?
(Laughs) Yes.
You mention how critical it is to make accurate assessments. How does that work?
Here’s something else that keeps coming up: “We tried that and it didn’t work, so we tried something else.”
How many times do executives try a change program and when it doesn’t work, they simply come up with another change initiative. This is a huge problem.
But some companies have the courage to stay the course. Take the case of SSM Health Care, another company I outline in the book. After 5 years of spending money and seminars and intense work on total quality management, a senior executive gets asked “Are we still doing CQI?” CQI was the continuous-quality-improvement initiative they had introduced five years earlier.
To their credit, they realized they had been “mucking around.” So they dug in. Something was missing. And it came out that the problem was that they were not making accurate assessments. They were trying to solve problems before they did a decent stab at the root-cause.
Ask “why” 5 times. The tendency is to try to fix something as soon as you see something wrong. Problem is people try to fix problems quickly, but they don’t fix the root cause. Why? Because they didn’t ask why enough.
The Five Whys is not new. It comes to us from Taiichi Ohno, the creator of the Toyota Production System. He believed that if managers wanted to start with a clear and accurate assessment of any problem, they had to ask why five times before trying to create a solution.
I also mention the case of Bill Zollars at Yellow Transportation– he wanted the company to start exceeding customer expectations by making sure their clients were very satisfied, not just satisfied, mind you, but very satisfied. He found out that the assessment his VP of Marketing had made of customer satisfaction was way, way off. And he found this out because he delved deeper. He checked the accuracy of their assessments.
Let’s talk about choosing the right people – the second building block…
Sure – I come from a background where you hire for experience. While researching this book, I found out that sometimes it’s more important to hire attitude over experience.
There’s another myth out there that says that anyone can accomplish anything if they just put their mind to it. There’s so much junk science out there that I had to really to clear the weeds, to find out what really works.
For example, research tells us those managers who make sure there’s the right fit between people and their goals before they take action double the likelihood of success.
There are people who are perfectly suited for the New York Yankees style of management. Others aren’t.
Sometimes the HR bureaucracy doesn’t give you the time. I talked to a manager who said they had 45 minutes to interview each candidate, which was simply not enough to get to know someone before hiring them.
HR sometimes is its own worst enemy.
Now at IKEA we have something different. Why? Because Pernille Spiers-Lopez, the president of IKEA North America. spent four years as manager of human resources for IKEA North America before being named president. She doesn’t have to put up with the nonsense. They’ve totally reinvented the HR function and it’s a beautiful thing to see. I did not talk about this in the book, but the IKEA hiring process gives them a competitive advantage.
[Note: Working Mother magazine named IKEA North America one of the 100 best companies for working mothers and singled out Spiers-Lopez for its Family Champion Award. The company provides benefits not widely offered retail workers in the U.S: full medical and dental insurance for those who work as little as 20 hours a week, including coverage for domestic partners and children; paid maternity leave; tuition assistance; a 401(k) matching plan and flexible work schedules. Spiers-Lopez was named president in 2001, when sales staff turnover was 76%. The next year these and other policies helped the company slash turnover to 56%.]
HR people are dying to get a seat at the strategy table. They have to be invited to the table because they bring something to the table. Traditional HR does not.
The key again is to connect personal goals to the goals of the organization. And sometimes that doesn’t just happen. As a leader, you have to make it happen. And if HR is going to be relevant, its got to become better at identifying and discovering talent.
And you’re only going to make that happen if you can outmaneuver the CAVE people.
Who are these CAVE people?
Anand Sharma at TBM Consulting Group gave me that acronym.
CAVE stands for Citizens Against Virtually Everything.
Just as our bodies have an immune system that assaults everything new and unfamiliar, organizations have their own auto-immune response that impulsively and instinctively attacks everything new or different- the CAVE people. They work overtly and covertly to undermine the change initiative your company is depending on. In the book I outline the strategy for outmaneuvering them, to give your change initiative a fighting chance of success.
Can you give us a hint how? How do you outmaneuver the CAVE people?
Anand Sharma was very kind to share these insights with our readers. I go into the details in the book, but essentially:
1. Kick off your change initiative with a “wow” event.
2. Blitzkrieg them (follow through so fast the CAVE people don’t have time to organize resistance)
3. Create disciples from the rank and file
4. Take your success story straight to the top
The bottom line is to execute, you simply have to get past the CAVE people.
Why are some people so motivated? And others so unmotivated? And why do incentive plans not work? That’s something I examine in the book as well.
This is all great, actionable knowledge for executives who want to get things done. We should let people buy the book to get the full story. Thanks for all your time.
Thank you.

A must read for everyone from the CEO on down…

World Economic Forum, Davos 2006: Connecting Globalization & Innovation

John Hagel and John Seely Brown have prepared this paper for the Annual Meeting of the World Economic Forum in Davos, Switzerland January 25 – 30, 2006.
It’s called: Connecting Globalization & Innovation: Some Contrarian Perspectives. [registration is required].
In the introduction, they say:
“We are only now beginning to grapple with the full implications of a globalizing economy. Tom Friedman captured our imagination with the powerful metaphor communicated in the title of his new best-selling book – The World Is Flat – but he tells only part of the story. In the process, he may leave many with a misleading impression. The world is not just flattening; it is also creating significant new opportunities to innovate and build strategic advantage. Much has been written about globalization and innovation as distinct topics, but few analysts have focused on exploring the connection between the two. Those who understand this connection – whether they are well established Western enterprises or entrepreneurial companies in emerging economies like China and India – will be able to create economic value on an unprecedented scale.
“Many companies in China and India are developing an innovative set of management techniques specifically focused on exploiting these opportunities. They are pursuing a radical, yet very pragmatic, bootstrapping approach to build capabilities while addressing near-term market opportunities. In a world of intensifying competition and increasing uncertainty, even the very largest companies need to master these bootstrapping techniques to compete successfully.
The three contrarian messages:
1) Bootstrapping is not just for small, entrepreneurial companies.
2) The United States is no longer the global center of innovation in management practices.
3) Product innovation is not the most powerful form of innovation, even though this is what most Western executives focus on when they think about innovation.
Sign up and read the whole thing. It’s an eye-opener!

The Irrelevance of Walter Cronkite

MWW’s Michael Kempner tells us:
“When I hear his [Walter Cronkite’s] comments today, it strikes me that there is no better example of how materially the media has changed since the 1960’s. Today, no one person and no single television network newscast own the hearts and minds of the American public. Cronkite’s words and the parallels to the power of his 1968 comments clearly illustrate how diffused and muddled the media has become since that time. Today, it’s more likely that public opinion will be shaped by a group of unknown bloggers, Internet coverage, and 24 Hour Cable News than a talking head on ABC, NBC or CBS. While network news still has an important place in informing and influencing opinion, they are now but one piece of the puzzle. Today, public opinion is more likely to be shaped by a person’s favorite ideologically attuned media outlet or by “group reporting,” where scores of media chase each others’ stories, than by a singular and powerful voice.”
Kempner’s comment made me think- aside from the fragmentation of media, people don’t listen anymore. They are closed to voices outside their comfort zone. Not only is there no conversation, there is no attempt at dialogue. Either/Or. For us or against us. And this explains why people who listen to Pat Robertson won’t hear any other voices, period.
I’m guilty too. I listen to the voices I want to hear, and discount others. I’m not saying everyone should have equal time. But it helps to have different perspectives. Edge perspectives.
Is there anything or anyone that unites us? Events, perhaps, like Katrina or the World Cup. But even with Katrina, we saw the bifurcation of reality based on politics.

Chris Charron: The Digital Experience


Chris Charron defines a digital experience as products and services integrated end-to-end under the control of a single application. Digital experiences have three parts: 1) available content and services; 2) personal control devices; and 3) portable players and peripherals. All of these parts come together under one application in a single business model.
This is a good start, but it is a “business-view” of experience. Digital experiences are not restricted to on application or a single business model. That’s why businesses are having such trouble dealing with digital experiences.
Digital experiences are transcendent experiences, and go beyond content and services. The part Chris Charron leaves out is interaction. And digital interactions span applications, devices, and most importantly, business models.
Human beings are not business models.
Ask Walker Percy about that! [Hat-tip to William Dunk]

PR vs. Advertising: Barking up the Wrong Tree


Again, from the Economist:
“…PR is surprisingly effective, at least according to a recent study by Procter & Gamble, the world’s biggest consumer-products group. P&G is a firm that marketers pay a lot of attention to, not least because of its advertising budget of some $4 billion. It has always been at the cutting-edge of marketing—P&G is credited with inventing the television soap opera as a new way to sell goods. But with fewer people watching television and the circulation of many papers and magazines declining, the firm has become pickier about where it spends its advertising budget. Increasingly, it wants a measurable return on investment from its campaigns.”
Read it in the news >>
My point- at least PR is trying to tell a story.
So how does advertising fight back? With knowledge and entertainment, and yes, branded-experiences. Problem is most agencies are too stupid. Maybe it’s the stupidity of the clients.
Both PR and Ad agencies are inauthentic. Why do you want to hear propaganda and lies all day long? Give us truth, knowledge, insight, and a little bit of humor. Talk, don’t preach. Get a conversation going. And don’t talk about your products unless I ask you a question.
Of course, I’m talking about double loop marketing.

Britannica vs. Wikipedia vs. Digital Universe vs. Squidoo vs. ?

Who wants to be the knowledge repository for all mankind?
The race is on:
Encyclopædia Britannica: the free stuff is weak! [rank= 2,839]
Wikipedia: a controversy on quality [rank = 31]
Digital Universe: slow going in building out the “portals” [rank = 150,326]
Squidoo: too quirky? [rank = 6,290]
and of course there’s Google…
I’m betting on two things: “free” and “ease-of-use” – and the winner (today) is Wikipedia.

Underwhelming: McKinsey’s 2006 Predictions

The nerds at McKinsey are at it again with their sweeping generalities and “big-picture” historical perspectives.
The article – Ten trends to watch in 2006 – is rather underwhelming:
“Those who say that business success is all about execution are wrong. [what?!!] The right product markets, technology, and geography are critical components of long-term economic performance. Bad industries usually trump good management, however: in sectors such as banking, telecommunications, and technology, almost two-thirds of the organic growth of listed Western companies can be attributed to being in the right markets and geographies. Companies that ride the currents succeed; those that swim against them usually struggle. Identifying these currents and developing strategies to navigate them are vital to corporate success.
“What are the currents that will make the world of 2015 a very different place to do business from the world of today? Predicting short-term changes or shocks is often a fool’s errand. But forecasting long-term directional change is possible by identifying trends through an analysis of deep history rather than of the shallow past. Even the Internet took more than 30 years to become an overnight phenomenon.”
Here are the trends they’ve identified. Wow, I’m speechless.
Macroeconomic trends
1. Centers of economic activity will shift profoundly, not just globally, but also regionally.
2. Public-sector activities will balloon, making productivity gains essential.
3. The consumer landscape will change and expand significantly.
Social and environmental trends
4. Technological connectivity will transform the way people live and interact.
5. The battlefield for talent will shift.
6. The role and behavior of big business will come under increasingly sharp scrutiny.
7. Demand for natural resources will grow, as will the strain on the environment.
Business and industry trends
8. New global industry structures are emerging.
9. Management will go from art to science.
10. Ubiquitous access to information is changing the economics of knowledge.
Advice to CEOs – if this is the advice you’re paying McKinsey for, save your money! Just read your Economist and the Global Province every week and you’ll come out ahead!
Poor show, Mr. Davis. If you’re listening, Fred Gluck – it’s time to get back in and take names and kick some …

Clayton Christensen on How Apple can Mess Up

Here’s a great interview with Professor Christensen in BusinessWeek:
Apple is doing phenomenally well these days. It seems it’s doing a textbook job of maintaining huge market share in digital music players, long after most experts thought that share would erode. And it’s doing so with the same proprietary strategy that many thought would never stand up to an onslaught from the likes of Microsoft (MSFT), Wal-Mart (WMT), and Yahoo! (YHOO). Can Apple keep it up?
I don’t think so. Look at any industry — not just computers and MP3 players. You also see it in aircrafts and software, and medical devices, and over and over. During the early stages of an industry, when the functionality and reliability of a product isn’t yet adequate to meet customer’s needs, a proprietary solution is almost always the right solution — because it allows you to knit all the pieces together in an optimized way.
But once the technology matures and becomes good enough, industry standards emerge. That leads to the standardization of interfaces, which lets companies specialize on pieces of the overall system, and the product becomes modular. At that point, the competitive advantage of the early leader dissipates, and the ability to make money migrates to whoever controls the performance-defining subsystem.
In the modular PC world, that meant Microsoft and Intel (INTC), and the same thing will happen in the iPod world as well. Apple may think the proprietary iPod is their competitive advantage, but it’s temporary. In the future, what will matter will be the software inside that lets users find exactly the kind of music they want to listen to, when and where they want to, with minimal effort.
But Apple has that software. It can be the one to provide that to everyone else, if it chose to, right?
I’m concerned that they’ll miss it. It’s the fork in the road — and it’s comparable to the fork they faced when they chose not to open up the Mac in the 1980s, when they let Microsoft become Microsoft.
How long will Apple have to make this change?
I’d be very surprised if three years from now, the proprietary architecture is as dominant as it is now. Think about the PC. Apple dominated the market in 1983, but by 1987, the industry-standard companies, such as IBM (IBM) and Compaq, had begun to take over.
Christensen also says something interesting about hedge funds: don’t even think about them as shareholders!
Read the BW article >>
See also my post: Clayton Christensen: The Innovator’s Battle Plan and my interview with Clayton Christensen >>

China’s 5 Surprises + 1

From S+B:
Five facets of business in China may surprise most outsiders:
1. Local entrepreneurs are interested in producing global brands, not just low-cost commodities
2. China has become a hotbed for rapid innovation
3. Executives from around the world are moving to China for the long haul
4. Good management and transparency are starting to count more than patronage, at least in some sectors
5. China is becoming a catalyst for growth in emerging markets throughout the developing world.
Let’s add another surprise:
6: China is becoming a market for high-end luxury items once thought to be “exclusive” for the western elite and Middle-East oil-barons.
Also:
“Because they are in such a hurry to make a place for themselves, and because it is still early in the life cycle of their ambition, Chinese entrepreneurs tend to give the impression that they don’t care much about quality. However, that is not universally true. Many of them recognize the trade-offs among cost, quality, and time that exist for any startup, and they have explicitly chosen designs and processes that sacrifice quality for the sake of speed and cost savings.
“But this doesn’t mean that China will always be a nation of commodity enterprises; indeed, many Chinese businesspeople know the price of a Motorola phone in Chicago or a pair of Nike sneakers in Manhattan. They ask themselves, “If I can make these things, why can’t I sell them for higher prices?” Some of them are already laying the groundwork for the evolution of their industries from low-cost producers of shoes, handsets, and components to branded enterprises.”
Read the entire article here.
This will come back to bite almost all of our western “outsourcers.” See “Innovation Blowback” by JSB and JH3 >>

The Economist Podcast on India

In the coming year India will enjoy greater international prestige than at any time since independence in 1947. With an economy that could grow at more than 7% for the fourth year in succession, that prestige is based in part on sheer clout. Over the next half-century India will emerge as one of the world’s biggest economies and great powers…
Listen to or download this podcast discussion on India’s emerging market with Simon Long, South Asia bureau chief, The Economist.

Andy Grove: “Engage and then plan…”

Harvard’s Richard Tedlow tells us the Andy Grove story in Fortune:
“At Intel he (Andy) fostered a culture in which “knowledge power” would trump “position power.” Anyone could challenge anyone else’s idea, so long as it was about the idea and not the person–and so long as you were ready for the demand “Prove it.” That required data. Without data, an idea was only a story–a representation of reality and thus subject to distortion.”
An example? How Grove managed his prostrate cancer treatment:
“…when he was diagnosed with prostate cancer in 1995, Grove found himself in the position of most patients: frightened, disoriented, and entirely reliant on the advice of doctors. Their advice was straightforward: Surgery was the best option, and that was pretty much all there was to it.
“Was it, though? It took very little to discover that there was much, much more to it. There were alternatives to surgery. No surgeon advised him to take them seriously. But the expert opinions, Grove soon determined, were just that–opinions, based on little if any hard data. Data did exist. What Grove found most shocking is that no one had done the hard work of pulling it together. Plainly, Grove would have to do it himself.
“The patient, in effect, became his own doctor.”
and-
“What Grove found most appalling, in the end, was the utter fixity of belief among doctors who failed to separate knowledge from conventional wisdom. Even the doctor who carried out Grove’s procedure was captive to it. “If you had what I have, what would you do?” Grove asked him at one point. The doctor said he’d probably have surgery. Confounded, Grove later asked why. The doctor thought about it. “You know,” Grove remembers him saying, “all through medical training, they drummed into us that the gold standard for prostate cancer is surgery. I guess that still shapes my thinking.”
On technology and strategy:
“His (Grove’s) speech was a strong statement about strategy. Understanding comes from action. So “be quick and dirty,” he said. “Engage and then plan. And get it better. Revolutions in our industry in our lifetime have taken place using exactly this formula. The best example is the IBM PC”–created on the fly by a team in Boca Raton.”
There’s more… Read the article >>

Soccer Fun on Google Video

Soccer is the global attention magnet.
Don’t believe it? Check out Google Video: one of the most popular clips is this one. I’ve watched it twice already. Henry, Roberto Carlos, Beckham, Ronaldinho, Ronaldo, Ziddane – you name ’em!
See this clip as well (it ends with Maradona’s infamous “hand-of-God” goal against England)… and this, and this!
Google – you have a winner!

Jakob Nielsen: Google, Yahoo are Leeches!

Usability guru Jakob Nielsen says: “search engines extract too much of the Web’s value, leaving too little for the websites that actually create the content.”
And: “In the long run, every time companies increase the value of their online businesses, they end up handing over all that added value to the search engines. Any gain is temporary; once competing sites improve their profit-per-visitor enough to increase their search bids, they’ll drive up everybody’s cost of traffic.”
According to Nielsen, “liberation from search dependency is a strategic imperative for both websites and software vendors.”
What does he mean? He means that companies need to focus on search engines for initial acquisition, but then bring them directly to the site- i.e. keep ’em coming back for more.
Again, his words: “The question is: How can websites devote more of their budgets to keeping customers, rather than simply advertising for new visitors?”
Nielsen offers the following suggestions:
– Email newsletters
– Request marketing
– Affiliate programs
– Newsfeeds
– Stick your URL onto any physical product you sell
– A hardware component that’s hardwired to connect to your site’s service
– Mobile features
I have a powerful answer: ’tis double loop marketing!
Read Nielesen’s post >>
Bonus: an interview I did with Jakob Nielsen years ago now…

Wild Rumor: Ballmer Out, Clinton In @Microsoft

This one is so wierd, it could be true. Andy Abramson says that Bill Clinton will replace Ballmer, or perhaps get on the board. I believe it’ll be the latter.
Why? Because Bill Clinton can’t focus on just one thing. After all, he’s gotta fight AIDS, help with the Tsunami+Katrina recovery, build a sustainable energy strategy for the US, get Hilary ready to run for President, his Global Initiative, and his Small Business Initiative… and that’s just in the a.m.
See what I mean? No way he’s going to waste his time as president of Microsoft.
That said, he’ll do great on the board. He can go up against Al Gore who’s on the board at Apple. Frankly, I see Bechtel hiring him as an advisor before Microsoft. Now would that be ironic.
Besides, look for Google to hire him away from Microsoft! 🙂

Bill Gates Worries about Big Blue, not Google

“The biggest company in the computer industry by far is IBM. They have the four times the employees that I have, way more revenues than I have. IBM has always been our biggest competitor. The press just doesn’t like to write about IBM,” said Gates in an interview on Wednesday ahead of his keynote speech at the Consumer Electronics Show in Las Vegas…
Wait till the Google-Desktop takes over MS-Office.
What’s Google-Desktop? It’s how Google will take over your PC via the web. Fits in nicely with a $100 PC don’t you think?
What does a web-based desktop look like? Take a look at this.
OK, I admit it has a ways to go, but I know Google will do this right. They’re going to add an “open-office” component to the web-desktop. You’ll be able to do your word-processing, your spreadsheets, your presentations, your email, your calendar, your RSS subscriptions, your blog, your IM, your VOIP, your video-conferencing, your downloading, your podcasts, your news, your search, and your shopping all at Google.com. That’s going to be the real Google Pack!
And that’s why AOL went with Google, not Microsoft.
Microsoft will become a B2B software company, and yes, IBM will be the biggest competitor in that space.

Getting Your IT Nerds to Innovate

Few studies have studied adoption of IS innovations by IS development (ISD) organizations. I just found a study that does.

Apparently researchers observed ten factors explaining radical innovation.
Seven factors were internal or organizational factors of which four characterize a configuration of capabilities that promote radical innovation within the firm. These four are: 1) Depth of Knowledge Resources; 2) Specialists; 3) Diversity of Knowledge; 4) Related Assets. The remaining three internal factors relate to features of processes where these capabilities are mobilized in ways that promote radical innovation. These three are: 5) Intra-firm Structural Linkages; 6) Experimentation; and 7) Technological Opportunism.
In addition to the seven organizational (internal) factors, three additional environmental (external) factors predict radical innovation within ISD organizations: 8) Environmental Dynamism; 9) Unit Autonomy; and 10) Adopters’ IT Strategic Congruence.
Read the report >>

Michael Porter: The Relationship between Innovation & Living Standards

During the 1990s, Americans found a way to do what seemed no longer possible — grow the economy, create jobs, and increase the standard of living, without driving up inflation. Much of the credit goes to the nation’s ability to develop and commercialize new technology. The result: one of the most robust periods of economic expansion and prosperity of the past century.
Today, the nation is experiencing an economic downturn. While fiscal and monetary policies pump dollars into the economy to boost the level of activity, innovation infuses the economy with growth-incubating new ideas, new products, services, and technologies. National policies and national investment choices have much to do with the growth and capacity of the American economy. For innovation, however, the real locus of innovation is at the regional level. The vitality of the U.S. economy then depends on creating innovation and competitiveness at the regional level.
In healthy regions, competitiveness and innovation are concentrated in clusters, or interrelated industries, in which the region specializes. The nation’s ability to produce high-value products and services that support high wage jobs depends on the creation and strengthening of these regional hubs of competitiveness and innovation.
Led by our buddy Michael Porter, the “Clusters of Innovation Initiative” examined five regions around the country: Atlanta, Pittsburgh, the Research Triangle, San Diego and Wichita.
One key point: “Growth is not the same as prosperity. Growth is only desirable if the standard of living of citizens rises. High growth per se often leads to a rising cost of living that erodes prosperity and degrades natural resources and physical infrastructure that support quality of life.”
My question: are there virtual innovation clusters out there as well? Clusters tied by purpose, but not geography? Is there a way to create and strengthen a virtual innovation cluster?
Read the report, and let’s talk >>

Googlespace Update: Video-On-Demand

Let’s see, what is Google’s innovation rate? One new service per month, per week?
Today we’ll see Google-Video and Google-Wallet. CBS is in on the deal with Google. So is the NBA.
Will Google go after the World Cup? If they do, it’s goodbye, Yahoo!
Another interesting day in Googlespace…