Learning from History

The Economist has a story on why Japan lost the mobile-phone wars to Scandinavia, Korea and others despite having been a pioneer in technology and usage of mobile devices. Japanese players are doing alright within Japan and still provide high-value components like the hard drives and screens from Toshiba – but the mobile world has moved on with other global players in hardware, software and usage.

The analysis on why the Japanese failed has an uncanny correspondence to trends and challenges in Enterprise Business Systems today.

“First, too many Japanese companies make phones. All major electronics firms sell them, mainly as a matter of corporate pride: not to do so would be a sign of weakness. As a result, 11 different domestic makers compete, most of them at a loss.”

Well, too many businesses try to write their own systems from scratch instead of reusing the globs of code written already all over the world. Standards and technology have existed for quite some time now that help put an ‘envelope’ around the code you want to reuse. This allows a black-box approach to ‘composing’ new arrangements of business-models. The value is in how the components are put together – and not always on the individual component.

“Second, Japanese manufacturers concentrated on the domestic market at the expense of global growth. Yet the national business model is unique: mobile operators design the features of the phone, and the manufacturers must comply. So the makers do not have a good understanding of what users want…” 

“Third, the manufacturers designed products around home-grown technical standards and special features that are not used elsewhere. “

This reminds me of IT shops in companies faithfully implementing every single enhancement request from business users without asking the additional questions, “Is this the standard way the industry operates? If not, then does this enhancement give you a unique competitive advantage?” The discussion should focus on reducing total cost of operations of industry-standard ‘utility’ processes and on investing resources in processes that create a competitive edge.

“Fourth, high-end customers who want sophisticated phones drive the Japanese market, but the main growth in the wireless industry overall is in emerging markets, which need cheap phones. The world’s top three makers—Nokia, Samsung and Motorola—focus on this segment.”

This is where the IT groups spend their annual budgets on high-end enterprise systems – ERP’s, CRM’s, SCM’s and similar ‘will fix everything and the kitchen sink’-initiatives. No money left over to analyze and improve the typical users’ workday  -better and more flexible productivity, collaboration and organization tools. No wonder the IT groups within business organizations are facing challenges from ‘mass-market’ technologies like Google Apps, WordPress blogs, Linked-In Contacts and a variety of desktop and mobile gadgets that help with balancing work and home lives. The tech-savvy, gadget-laden, knowledge-worker – with an equivalent of an IT shop at home – is the new ’emerging market’.

IT groups supporting business enterprises can add this chapter to their ‘Learning Book’…yet another set of rationale justifying the need to reinvent.

Gamers make the Best Employees

Brent Hutchison John Seely Brown and Douglas Thomas recently wrote on a Harvard Business Review blog about the Gamer Disposition – an attitude and set of traits that are ideal for today’s employees. He writes that

Today’s multiplayer online games are large, complex, constantly evolving social systems. Their perpetual newness is what makes them enticing to players.

The gamers have bottom-line orientation, understand the power of diversity, thrive on change, see learning as fun and pride themselves on discovering radical and innovative solutions. All these together are the perfect buzzwords for a resume or a cover-letter that I want to receive for everyone on my team. In this age of accelerating change, we cannot afford static structures and certainly no team that cannot be nimble and quick at the draw.

After establishing that Gamers have the best traits for being the best employee today, it will be interesting to ponder why that might be so. Interactive games provide a compressed timeline, a clear goal but unstructured and unknown environment – requiring rapid learning, environment scan, evaluation of options and decision making…in order to get rewarded by immediate feedback and hopefully a promotion to the next level!

Looks like getting Gamers to be employees is a great idea, but be prepared to create a challenging and exciting environment for them…or watch them switch to another game.

The New Heroes -The Adaptables

‘Being adaptable’ is one of those backhanded compliments. It can have negative connotations associated with being wishy-washy, spineless, impressionable, naive, crafty, calculating, opportunistic and similar. Despite this the history of civilizations is full of examples where adaptation was critical for survival and for growth.

Adapting and evolving to exploit changes in the environment has now become a business buzzword – being Agile. Definitions of agility can range across the continuum from operational agility to business-model agility. I agree with the latter definition that James Taylor clarified recently.

Agility to us, I think, is a measure of responsiveness to change rather than responsiveness to customers or to orders. It is not the time it takes a company to, for instance, restock a product. While that’s an interesting thing to measure, it is not agility to me. The time it takes a company to change its reorder approach or a specific product/vendor is, however, a measure of agility. 

Being an agile organization requires it to be able to rearrange its people, processes and systems into new configurations at short notice. ‘Composing’ new value chains and business models using existing processes as components is the new competency that sets organizations apart. The new generation systems need to support these process-components in Service Oriented Architectures (SOA). And, we need many more of those ‘multiple-hat’ people who morph among roles like architects, business-analysts, project-managers, designers and customer-advocates.

Those video-game playing, text-messaging, social-networking, hyperactive, mobile, multi-tasking kids – and adults – are perfect for this paradigm. Systems are now available as Services that you plug into as and when needed. Businessweek claimed recently that  you may never buy software (or hardware) again.

No longer do small companies have to spring for servers and IT staff just to get the basics. With software services, you don’t install programs on your own computers or server. Instead, you sign up online for software and use it while you’re connected to the Internet.  

This agile, anything-can-change-at-any-time world needs ‘being adaptable’ in spades. The pace of change is accelerating and business-ecologies are constantly forming, dissolving, splitting, aggregating and reforming in a kaladeoscopic blur.

The Adaptables are center-stage now – as always leading the charge for survival and growth.

Follow thy Customer

ShopRite grocery stores have just started beaming customized ads to shoppers through their computerized shopping carts – as part of a Microsoft Atlas technology roll-out.

Microsoft will deliver the ads based on data obtained from ShopRite’s customer loyalty cards, according to the companies. When shoppers scan their cards on the computerized shopping carts, they will see ads and promotional offers on the screen based on their purchasing histories.. 

Most retail stores track customers’ path through the store to gauge effectiveness of various displays and product placements – mostly as passive observation to help with merchandising and advertising – and not for personalized sales and advertising. So, this is a proactive move at influencing customer behavior while shopping and not the usual attempt made with discount coupons spewing out of the printer at the checkout lane.

This story reminded me of the sophistication that some Casinos had put into place almost two years ago. At Harrah’s

Gamblers don’t just win money when they play at one of Harrah’s 26 casinos. When they swipe their loyalty cards, they’re also eligible to win a variety of perks, from appetizers to Swedish massages, depending on their level of spending and the information Harrah’s has collected about them. …..Data from low-rollers also convinced Harrah’s to redesign its casino floors to include, for example, a higher percentage of lower denomination slot machines and video poker games—for a 12 percent hike in slot revenues.

Loyalty programs of various kinds need not be just a mechanism to track and reward repeat customers. If technology is used appropriately, a loyal customer can now be tracked through the shopping experience and also through the service delivery experience. A very comprehensive set of data can then be collected at that micro-level of interaction – analyzed at an aggregate – allowing new products, services, marketing and attention to be delivered seamlessly back to the customer at the individual level.

Customer and Seller can now be engaged in a longer relationship, learning from each other and helping each other be more efficient, effective and profitable.

The Creator, The Seller and The Personal Shopper

Walking down the aisles of a super store like Walmart or browsing the categories of an on-line super store like Amazon, I take for granted the choices in products that are laid out for me. Isn’t that these guys’ job? Go out and get the best possible products in terms of price and quality….get them in front of an amazingly large population…see what sells and make adjustments to the product lines that are carried. These are the big Sellers – the aggregators – Pure Sellers, not Creators.

Then, there are the not-so-big Sellers – either very ‘home-made’ and low-volume products from the neighborhood bakery and the art gallery; or the high-end, life-style products with exclusive branding that just cannot be placed next to any other product. Usually these Sellers are the Creators themselves, and need to excel in both areas to sustain themselves and grow.

So if I am a Creator, I need to decide how I get my customers – vie for attention from the big aggregators or sell myself – depending on my production-volume and/ or the perceived exclusivity of my product.

As with all other products, consumers are gravitating towards ‘super-stores’ for travel purchases. The big Seller’s list in travel products is now getting a shake-out and will be interesting to watch. The usual places to look for travel were Expedia, Travelocity, Priceline and Orbitz – but all of them have ‘deals’ with Creators and influence the product lines they carry – similar to the Walmarts and Amazons of the world.

The new deal is the Search Engine. Google has finally convinced everyone that if something is out there, they can find it by googling (a bona-fide English language verb now!). There are the top three or four ‘search engines’ for jobs, cars, housing, books, music….and travel. If you are any good as a Creator, you are expected to  pop-up on all the searches done at any Seller’s online store or main-street store. 

The new “Sellers/Shoppers” are Kayak – stronger with their acquisition of Sidestep, and Yahoo! Travel – deeper now with their showcasing of Farechase technology. Both Kayak and Yahoo! emphasize that they are not stores, but your personal search agents that go out and do your shopping across multiple Superstores and smaller stores. There have been rumors of the venerable Google getting into the Travel Personal Shopper business, although Google has pooh-poohed any immediate plans in the past. But the latest excitement in this space may be catching……

So if I am a Creator aiming at the big league, not only do I need attention from the big Seller-Aggregators, but I need to do my best to show up in the Personal Search Agent searches.

This online world has made the third layer in distribution – the Personal Shopper  – affordable and attractive for all consumers. The Creators now have a shot at bypassing the Aggregator-Sellers.

The Goal of Automation

Why do we try to automate as much as we can – in the business world and in our own lives? The hope is that our routine and defined activities should take as little of our time as possible – and we have more time to spend on the fun things like doing nothing or inventing sliced bread 2.0.

So, when Allan Wille from CRM Daily wrote recently that the End-Game for Business Intelligence is to create sophisticated Dashboards, I was pleased to find James Taylor of ebizQ taking exception and inviting everyone to, “[please] kill me now….”

I agree wholeheartedly with James when he says

Surely the endgame for BI must involve some kind of predicting of the future, some looking forward?…….. why show them a dashboard when we could program the systems to ACT? Enterprise decision management would use this same data not to display a pretty graph on some marketing directors desktop, but to make the CRM system, the website, the call center and everyone involved in the organization act more intelligently.

Dashboards are good and relevant in some situations, but the goal is to have business rules drive and automate as much decision-making as possible. The rules themselves need to evolve and become sophisticated enough to ‘sense’ the environment and the context based on raw data feeds – on our way to the Intelligent Enterprise.

With sophisticated systems doing this intelligent work what do the people do? They can now take the next unstructured problem and put structure to it – in a constantly escalating endeavor to tame the next market and the next competitor, or to discover the next breakthrough product.

Let’s not spend time doing things that machines are better at!