Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • The four why’s of Sam Palmisano

    The four why’s of Sam Palmisano

    The New York Times’ profile of IBM’s outgoing CEO, Sam Palmisano, is an interesting study of how an established business can make well thought out long term plans through asking some basic questions.

    Under Palmisano, IBM moved a large part of their business from manufacturing and distributing computers to more Internet based products and services.

    A key part in IBM’s reinvention was recognising the PC hardware business was in decline as commoditisation of the computers and associated components eroded margins.

    To counter this, IBM looked at the areas where they believed the margins would be for the next decade and decided they lay in “on-demand” computing – what we now call “cloud computing”.

    What is particularly notable with IBM’s move to the cloud is this renting time on mainframes was the mainstay of their business up until the 1990s so the culture of reliable, accessible services backed by well priced plans is something not unknown to IBM.

    Having decided on the on-demand computing strategy, IBM then looked at who would buy their hardware division. Here they acted strategically and rather than selling to the highest bidder – someone like Dell or a private equity firm – they sold to China’s Lenovo which enhanced IBM’s standing within the Chinese markets.

    The notable thing with all of these plans is that they were made strategically and executed without the dithering we see at other companies struggling with similar issues. Yahoo! and HP being the two standouts in this area.

    While smaller businesses can’t execute on the same scale companies the size of IBM can should they choose, Sam Palmisano’s thinking was guided by four key questions;

    • “Why would someone spend their money with you — so what is unique about you?”
    •  “Why would somebody work for you?”
    • “Why would society allow you to operate in their defined geography — their country?”
    • “Why would somebody invest their money with you?”

    These four are something all of us could ask of ourselves and those around us. The answers to those questions are will guide what we do, where we do it and how we do it.

    For IBM, the future is fascinating as a new CEO comes in and they apply their investments in cloud computing, consulting and data mining to bigger picture projects like the Smarter Planet initiative.

    How this works for IBM and the other large technology companies remains to be seen although it’s quite clear that unlike many of their contemporaries, IBM’s management has a vision of where their business fits in the 21st Century.

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  • The importance of transparency

    The importance of transparency

    The US Federal Reserve has announced they will release more details from the information they use on determining official interest rates. On the same day the social networking site Twitter is embarrassed when its opaque verified account policy fails.

    Being open and honest is the key component in trust and in turn trust is the bedrock of society. If you can’t trust your neighbour, the local cop or the grocer at the shops then society quickly starts breaking down.

    Many big businesses, particularly those in markets where they are one of a small group of incumbents get away with abusing your trust; they tell an illegal surcharge can’t be waived because “that’s their policy, you can’t change an account because of the “terms and conditions” and that the call centre’s operators name is Janet even though it’s Rajiv and you know that when you call back asking for “Janet” you’ll be told”there’s 35 Janets working in the department right now”.

    All of this we’ve come to expect from big bureaucratic organisations like the phone company, the bank and the tax office. The interesting thing is how many new businesses that are adopting this anti-customer model of operating.

    Rules and policies are fine – as long as everyone knows them, they aren’t too onerous and they are applied fairly and consistently.

    The challenge for all businesses – particularly those taking on incumbents – is they have to show they are more trustworthy than the existing operators. If you can’t show that, then maybe it’s time to think about how you operate.

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  • What Rupert did wrong

    What Rupert did wrong

    A small step in the evolution of social media happened over the new year when Rupert Murdoch joined Twitter and almost immediately, and predictably, his tweets attracted criticism.

    While there’s still a nagging doubt as to whether the @rupertmurdoch account is real, despite the assurances of Twitter founder Jack Dorsey, there’s a few lessons other new users can draw from Rupert’s experience.

    Shut up and listen

    One of the unfortunate things about social media is how everybody assumes their voice has to be heard. It’s a mistake we all make when we first join theses services.

    Like social contexts, it’s best to be quiet when you first join until you’ve figured out the protocols, manners and dynamics of the group.

    Just stumbling in and blasting your opinions out doesn’t usually work well whether we’re at the pub, mothers’ group, updating Facebook or posting on Twitter. The key is to understand why you are there.

    It’s about community

    The first word in social media is “social”, these online services are a society and just restricting your circle to a select few isn’t go to give you a great deal of benefit.

    Rupert Murdoch’s account is a good example of how many people restrict themselves; at the time of writing he’s following five users. If it really is Rupert Murdoch behind the account, he’s missing some good and relevant stuff.

    If the person behind the account is really a new user, then they are probably wondering what all the fuss is about as two of the five accounts they are following haven’t been updated in months.

    What’s your objective?

    Why are you here is a good question. Have you come to listen to customers, learn from industry leaders, spruik a product, find a job, catch up with the folks or be one of the online hipsters?

    All of these and any other zillion objectives are perfectly valid reasons for joining a social media service. So listening and posting in ways that help your objectives makes sense, as does following the right people.

    The whole point of using social media services – be it Twitter, Facebook, LinkedIn or any of the other hundreds of online networking platforms – is to listen, learn and talk with your peers and the leaders of the areas you’re interested in. Perhaps you’ll even be considered a leader, as Rupert Murdoch certainly is.

    Starting by listening and understanding how a social media service works and where it adds value for you will make using the site a far better investment of your time.

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  • The death of the short message service

    The death of the short message service

    The New York Times’ Bits Section looks at how in many countries text messaging (SMS) services are declining.

    For telcos, the SMS feature was a happy – and extremely profitable – accident with the Short Message Service feature designed as a control channel for the mobile voice networks.

    The Short Messaging Service cost almost nothing to develop and quickly became a massive profit centre for mobile phone companies.

    Today in markets where smartphones are dominating sales, people are moving many of their communications away from text messages over to Internet based services like email, instant messaging and social media.

    Interestingly, in the United States text messaging still growing although at a slower rate than previously. This makes sense as the US is behind countries that have fully adopted 3G networks and subscribers don’t get the full benefit from a smartphone without a reliable and fast data service.

    For developing countries, we’ll probably see SMS continue to grow as the attractions of a relatively cheap and simple communications channel like text messaging still make sense in markets where data plans are expensive and smartphones scarce.

    As revenues from text messaging drops, we’ll be seeing more telecommunications companies try to replace the lost income with other services. Expect to see more offers for various business and home service bundles and offers to upgrade to the latest phones or packages as providers try to lock profitable customers into cash generating agreements.

    The era of accidental profits for telcos is over, the quest for these companies now is to find how they can maintain profits in an era where data services are commoditising their lucrative product lines.

    For the managers of these companies, the challenge is on to successfully do this – it remains to be seen how well they do in refocusing their businesses.

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  • What’s a Twitterer worth?

    What’s a Twitterer worth?

    $2.50 per month is what Phone Dog think a Twitter follower is worth in their lawsuit against a former employee.

    As nebulous and ambiguous as Phone Dog’s claim seems to be it appears some price is being created on the business value of social media users.

    To date we’ve seen services like Empire Avenue, Klout and Kred try to measure social media users’ real influence on the different web platforms which in turn allows businesses to allocate some sort of value.

    As social media and the web mature, we’ll see businesses spend more time understand where the value lies online.

    Each platform is going to have a different value to a business. Depending on the market, one person may be worth more on Twitter than on Facebook and similarly a business may put more value on members of a specific LinkedIn group or industry forum.

    What we shouldn’t confuse “value” with is how the services themselves make money. For Facebook, the value comes from the marketing opportunities presented by people sharing their lives while for LinkedIn it’s largely coming from employment related advertising and search.

    Other social media platforms are finding other ways to make money and each will have a different attraction to users, businesses and advertisers. All of which will affect their perceived value.

    That perceived value is the most important part of social media. If users don’t think a site adds something to their lives, then that service has no value to anyone.

    It’s tempting to think that people will object to having a “value” placed on their heads as users, but most folk understand the commercial TV and radio that does pretty much the same thing.

    The real question of how much people are prepared to share online will come when they understand the value of the data they are giving the social media platforms. When users start to understand this, they may ask for more service from these companies.

    What a Twitter user is worth right now is probably different to what they will be worth this time next year, but there’s no doubt we’ll all have a better idea.

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