Category: business advice

  • A question of ethics

    A question of ethics

    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.

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  • Developing digital leadership

    Developing digital leadership

    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.

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  • Facebook goes places

    Facebook goes places

    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.

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  • When margins collapse

    When margins collapse

    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.

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  • A lack of entrepreneurial imagination

    A lack of entrepreneurial imagination

    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.

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