Nov 232014
suspicious man watching for an interent scam

The debacle of Uber’s management proposing to threaten journalists drags on and is becoming a classic case of what not to do during a public relations crisis as the company and its supporters continue to make matter worse for themselves.

What’s notable about the hole Uber finds itself in is that it didn’t need to be there; a bit of maturity and commonsense, not to mention knowing when to shut up, would have helped avoid this self inflicted wound to the business.

Much of the damage done by the story could have been avoided by following a few simple steps.

Stop digging

One of life’s key rules is when you find yourself in a hole then the first step to getting out is to stop digging. When the critics are loud, shut up and take a breather. Instead of exacerbating problems, step back, have a think and, if necessary, get some professional help.

Have some perspective

The most fundamental attribute for managers and owners is not to take criticism too seriously; there are always critics and letting them consume your daily lives is counterproductive and ultimately destructive as Richard Nixon would attest.

Usually in business the critics aren’t diminishing you as a person, in most cases they are making observations about your company’s economic model or its actions in the marketplace. If you’re taking criticism too personally, it might be time for a holiday.

Just because someone is criticising you, it doesn’t mean they are in the pay of your competitors or part of the socialist-masonic-jewish-illumaniti conspiracy to get you, they may actually your best friends and even have a point.

Your business priorities

How do these criticisms affect your ambitions for your business? If Sarah Lacy thinks you’re a bunch of misogynist scumballs, does it matter? Often the critics don’t matter to your business as they are a different group to your customers, investors or staff.

Is there merit?

A key question when confronted with criticism should be ‘is there merit to this?’ Before threatening to smear or sue those pointing out your business’ shortcoming it’s good to have a look to see if the critics do have a point about what you’re doing wrong.

Fix the problem

Should it turn out the critics do have a problem, then fix it. Should it turn out your business has a toxic bro’ culture then fire a few of the toxic bros and hire some people with the backbone to fix the problem.

Be open about things

If the criticisms are legitimate, then acknowledge them and be open about how you’re going to fix them. Some critics won’t be satisfied but that’s part of life, you won’t keep everyone happy.

For those critics who will be happy, admitting you’ve made mistakes and are working on fixing the problems will win more fans and supporters. People love a bit of humility and it probably doesn’t hurt for managers to be a bit humble.

On the other hand, it might be that some of your critics do genuinely hate you, are in the pay of your competitors or part of the Illuminati conspiracy. In which case, use facts and stand your ground. In the battle for public opinion, having the facts on your side always gives you the advantage.

Personally attacking your critics though is always a mistake and, as Nixon found, smearing them turns out to be a mistake. Life is too short and time in running a growing business too scarce to be consumed by hate. Get over it and move on.

Get professional help

In Uber’s case it appears their managers have been frantically calling their buddies to help out — this hasn’t helped and has probably exacerbated an already heated environment. A good professional PR adviser or reputation management company will know how to at least ease the pressure if not completely defuse the situation.

Regardless of how good the PR adviser are though, ultimately a business’ good name comes from its management and how the company behaves. This where Uber has to take more care as it becomes a global giant.

Nov 202014

At this week’s Australian Gartner Symposium ethics was one of the key issues flagged for CIOs and IT workers; as technology becomes more pervasive and instrusive, managers are going to have to deal with a myriad of questions about what is the moral course of action.

So far the news isn’t good for the tech industry with many businesses failing to deal with the masses of data they are accumulating on users, suppliers and competitors.

A failure of transparency

One case in point is that of online ride service, Uber. One of Uber’s supposed strengths is its accountability and transparancy; the service can track passengers and drivers through their journey which should, in theory, make the trip safer for everybody.

In reality the tracking doesn’t do a great job of protecting riders and drivers, mainly because Uber has Silicon Valley’s Soviet attitude to customer service. That tracking also creates an ethical issue for the company’s management and one that isn’t being dealt with well.

Compounding Uber’s ethical problem is the attitude of its managers, when a Senior Vice President suggests smearing a journalist who writes critical stories then its clear the company has a problem and the question for users has to be ‘can we trust these people with our personal data?’

With Uber we may be seeing the first company where data management and misuse results in senior management, and possibly the founder, falling on their sword.

Journalists’ ethics

Another aspect of the latest Uber story is the question of journalistic ethics; indeed the apologists for Uber counter that because some journalists are corrupt that justifies underhand tactics from companies subject to critical articles.

That argument is deeply flawed with little merit and tells us more about the people making it than any journalist’s ethical compass, however there is a discussion to be had about the behaviour of many reporters.

As someone who regularly receives corporate largess — I attended the Gartner Symposium as a guest of BlackBerry and will be going to an Acer event tomorrow night — this is something I regularly grapple with; my answer (or rationalisation) is that I disclose that largess and let the reader make up their own mind.

However one thing is clear at these events; everything is on the record unless explicitly stated by the other party. This makes Michael Wolff’s criticism of Ben Smith’s original Uber story in Buzz Feed pretty hollow and gives us many pointers on Wolff’s own moral compass as he invites other writers to ‘privileged’ dinners where the default attitude is that everything is off the record.

Playing an insider game

Ultimately we’re seeing an insider game being played, where journalists like Wolff put their own egos above their job of telling their audience what is happening; Jay Rosen highlighted this problem with political coverage but in many respects it’s worse in tech, business and startup journalism.

It’s not surprising when a game is being played by insiders that they take offense at outsiders criticizing them.

Once the customers become outsiders though, the game is drawing to an end. That’s the fate Uber, and much of the tech industry, desperately want to avoid.

Uber in particular has many powerful enemies around the world and clumsy management mis-steps only play into the hands of those who see the company as a threat to their cosy cartels. It would be a shame if Uber’s disruption of the many dysfunctional taxi markets was derailed due to the company’s paranoia and arrogance.

Eventually ethics matter. It’s something that both the insular tech industry and those who write on it should remind themselves.

Nov 192014

Technology and talent are the biggest worries for CEOs today says Peter Sondergaard, Gartner’s Senior Vice President for Global Research, however those challenges are part of a much greater shift in business.

In an interview at the Australian Gartner Symposium on Queensland’s Gold Coast, Sondergaard discussed how businesses and their senior management have limited time to adjust to a rapidly evolving marketplace.

Sondergaard believes that companies have 24 months to face the changes which academic and futurist Andrew McAfee forecasts is going to overwhelm businesses and society in the near future.

In this environment IT workers have a unique position in being responsible for implementing technologies within organisations, however according to Gartner’s research only 15% of CEOs see their tech teams as leading change within the organisation.

“The transformation that a lot of people are grappling with is ‘how do I translate this into action in leaders?'” Sondergaard suggests. “Organisations have leaders in financial backgrounds and people who understand people management, leadership and customer facing activities.”

“Businesses expect this in every senior leader hired in the organisation but somehow it’s okay to accept those people have their son or daughter do everything technology wise. In the future you can’t have that.”

“Digital leadership is at par with all other assumed skills in what is a fully rounded business leader.”

A generation change

Sondergaard sees a generational change happening in senior management as the new guard are more comfortable with technology, having had to deal with the 1990s PC boom as well as the internet during their working lives.

“The change generally happens when you switch CEO, it’s very funny to watch right now how new CEOs that come in, change the strategy completely and focus on digitalisation.”

For many companies, this is a dramatic change in business practices and one that doesn’t come without resistance within the organisation, although the marketplace may force these reforms as margins fall.

Changing focus as margins fall

A problem facing managers that Sondergaard sees is the falling margins faced by businesses as new competitors unencumbered by legacy systems enter the marketplace.

Most of these competitors bring the ‘startup ethos’ into their industries — with no fixed overheads the new entrants are far more flexible than the incumbent businesses.

Stock markets are also making the problem worse with older businesses being held to different benchmarks than the new players.

To illustrate this Sondergaard cites Amazon and IBM where are both staking their futures on cloud services that are barely profitable; for this IBM is punished by investors while Amazon continues to get stock market support.

Owning the ethical risks

Another challenge facing businesses in going digital are the ethical considerations, this is a complex and multifaceted area that is going to test managers throughout organisations as new technologies give rise to unforseen risks.

“What does your brand want to stand for in a digital world?” Sondergaard asks, “I think we will need people who articulate the brand, and what we do from a technology perspective.”

“Ethics in this is a very part of the user experience which becomes very complex very fast. If you don’t have someone who owns this from a co-ordination perspective I would say you get an element of risk that you don’t want.”

For managers across all industries the challenge is to deal with the disruption that is happening now and the greater changes that are looming, Sondergaard believes this requires a ‘bimodal’ way of doing business that balances the needs of existing markets with the demands of a much more complex fast moving developing digital marketplace.

This is a big task for managers and one that many will struggle with. Those who don’t succeed are going to struggle in a very turbulent business world.

Nov 142014

The relaunch of local discovery service Facebook Places was low key and remained un-noted until picked up by a German blogger this week.

Facebook’s local service is, on first look, quite impressive with it pulling together various features and data sources to give a quick guide to what’s on and what’s attractive in a city based on a user’s history.

In that respect it’s a clear threat to Yelp!, Tripadvisor and Google; particularly given the convenience of using a single app and getting recommendations based on the service most people spend the bulk of their online time upon.

At this stage it doesn’t appear the service is doing too much with the local business feature but it’s only a matter of time before those details start being fed into the algorithm as well.

Once again it shows why listings are important for local businesses. It may also be that Facebook is cracking the largely untapped local business market.

Nov 052014
In 2001 Microsoft released Windows XP

Two of the key indicators that your business model, and industry, is being threatened is declining sales and margins.

A good example of this is the story Microsoft are urging their Chinese resellers to use Office 365 as a loss leader to get their foot in the door with customers.

Not so long ago Microsoft Office was a huge cash generator for the business; now it’s a loss leader.

If anything this shows how the margins in the software business are being eroded by cloud computing. Businesses like Microsoft and its resellers that have grown fat on big margins now have to evolve to a very different marketplace.

This means a very different way of doing business, a different way of delivering products and much more streamlined operation that doesn’t need battalions of highly paid salespeople and managers. In fact those managers and salespeople become a very expensive legacy item in a cloud computing world.

Microsoft are by no means the only company to find themselves giving away once profitable products in order to maintain their market position but when that starts happening it’s clear the time has arrived to find a new line of business.

In Microsoft’s case that’s been a pivot to the cloud, however the company will never find things as lucrative as the good old days when software was sold in boxes or licensed out with impossible to read agreements.

Funnily, the same thing is happening in the telcommunications world. It’s an interesting time to be in business.

Nov 012014

A fascinating interview with Google founder Larry Page in the Financial Times raises the question of whether the current startup mania lacks imagination.

Certainly looking at the lists of many startup competitions, incubator admissions and accelerator programs, it’s hard not to be depressed at the number of ‘platform plays’ aimed at clipping the tickets of an established industry.

If anything, it’s encouraging the Google founder is looking at doing more interesting things than taking a few dollars clipping the tickets off industry. We can, and should, aspire to do better.

Oct 262014
mobile payments through smartphones and other devices are changing business

The payments war has been well and truly on as companies like Stripe, Apple and PayPal battle it out to control the next generation of currency.

One of the more hapless bystanders in this has been the CurrentC consortium, a group of US retailers set up to take advantage of mobile technology and bypass merchant fees.

This weekend news leaked out that some of the consortium members have disabled Near Field Communications functions in their store Point of Sale systems to prevent Apple Pay and Google Wallet from working while they wait to roll out CurrentC.

In a deep dive review of CurrentC, Tech Crunch looks at how the service works and its limitations. One of the things that jumps out in Tech Crunch’s review is just how cumbersome the system is compared to its competitors.

Despite being founded in 2011 and having the backing of some of America’s biggest companies, CurrentC is two, or possibly three, iterations behind other services which illustrates the problem of incumbents trying to innovate their way out of problems.

No doubt the committee model of CurrentC hasn’t helped the development process along with the aim being addressing the consortium’s fixation with merchant fees rather than making things easier for customers.

It’s hard not to conclude that CurrentC is doomed and the actions of retailers in blocking competitor’s products is only staving off the inevitable. When old businesses embrace new tech they have to be thinking of their customers’ problems, not theirs.