Category: management

King Canute and Google: When the algorithm is wrong

As society and business drown in big data we’re relying on algorithms and computer programs to helps us wade through the masses of information, could that be a weakness?

As society and business drown in big data we’re relying on algorithms and computer programs to helps us wade through a flood of information, could that reliance be a weakness?

British Archeology site Digital Digging discusses how Google displays Manchester United winger Ryan Giggs in the results search for Cnut, the ancient king of Denmark better known in the English speaking world as King Canute.

Apparently Giggs appears in the search results for Canute because of the footballer’s futile attempt to hold back a tide of information about his love life.

While Google’s algorithm seems to have made a mistake, it’s only doing what it’s been programmed to do. A lot of trusted websites have used the term ‘Canute’ or ‘Cnut’ in relation to Giggs so the machine presents his picture as being relevant to the search.

Confusing Ryan Giggs and King Canute is mildly amusing until we consider how critical algorithms like Google Search have become to decision making, there are no shortage of stories about people being wrongly billed, detained or even gaoled on the basis of bad information from computers.

The stakes in making mistakes based on bad information are being raised all the time as processes become more automated, a chilling technology roadmap for the US military in Vice Magazine describes the future of ‘autonomous warfare’.

By the end 2021, just eight years away, the Pentagon sees “autonomous missions worldwide” as being one of their objectives.

Autonomous missions means local commanders and drones being able to make decisions to kill people or attack communities based on the what their computers tell them. The consequences of a bad result from a computer algorithm suddenly become very stark indeed.

While most decisions based on algorithms may not have the life or death consequences that a computer ordered drone strike on a family picnic might have, mistakes could cost businesses money and individuals much inconvenience.

So it’s worthwhile considering how we build the cultural and technological checks and balances into how we use big data and the algorithms necessary to analyze it so that we minimise mistakes.

Contrary to legend, King Canute didn’t try to order the tide not to come in. He was trying to demonstrate to obsequious court that he was fallible and a subject to the laws of nature and god as any other man.

Like the court of King Canute, we should be aware of the foibles and weaknesses of the technologies that increasingly guides us. The computer isn’t always right.

Defaulting to transparency

Messaging startup Buffer seeks to be open in every aspect of business, will this help the startup grow?

Social media scheduling startup Buffer takes transparency seriously, will it help the business?

Many fine words have been written about openness, sharing and collaboration in recent years but few organisations really practice what’s been preached. An exception to this is social media service Buffer that takes openness to extreme levels.

Buffer keeps few secrets with the company sharing its monthly operating figures, internal emails and even its formula for calculating salaries.

The company’s CEO Joel Gascoigne believes this helps build trust in his startup, saying in his blog:

There are many reasons we default to transparency at Buffer, and perhaps the most important is that I genuinely believe it is the most effective way to build trust. This means trust amongst our team but also trust from users, customers, potential future customers and the wider public who encounter us in any way.

Building trust is one of the most important tasks of any business owner or manager; whether it’s with customers, staff, suppliers or investors and startups have a bigger task than most. So Joel is onto something with this approach although one wonders how long the philosophy will last as the company grows.

One thing that stands out in Buffer’s figures is how little Joel and his staff earn; while $158,000 is a good wage it isn’t the massive income that those who glamourize startups pretend founders earn.

Joel’s experiment with Buffer is an interesting experiment and it will be fascinating to see how long the company continues the philosophy of extreme transparency and how many others follow the example.

While it might not be necessary to be as open as Joel Gascoigne and Buffer, the idea of defaulting to transparency is one that many organisations – particularly governments – would benefit from adopting.

Becoming an all mobile executive

Salesforce CEO Marc Benioff says he’s gone completely mobile, will other executives follow?

“I don’t want to use a laptop again,” Marc Benioff told the closing Dreamforce 2013 customer Q&A. “The desktop remains the biggest security threat to corporations — it’s a nightmare. The PC and laptop we never designed to be connected to a network.”

Benioff was walking his talk in promoting his company’s Salesforce One mobile platform, claiming at the Dreamforce conference opening that he hadn’t used a PC or laptop or nine months as he’s moved over to tablet and smartphone apps.

That push to move the company and its customers onto mobile services was emphasised by Peter Coffee, Salesforce’s Vice President for Strategic Research.

“Your mobile device is no longer an accessory,” says Coffee. “It’s the first thing you reach for in the morning and it’s the last thing you touch at night.”

Salesforce’s push into into the post-PC market follows Google and Apple’s lead, much to the distress of Microsoft and its partners.

“We saw the phenomenal engineering work of Scott Forstall at Apple and the visionary work of the late, great Steve Jobs,”  Benioff told his cutomers at the final Dreamforce Q&A. “When we saw the iPhone we sat up and thought ‘wow, what are we going to do about this?'”

“This is a paradigm shift, we’re moving from the desktop world to the mobile phone world and then of course we saw the iPad world emerge and that amplified it.”

Salesforce’s impressions were shared by much of the business community as senior executives, board members and company founders quickly embraced the first version of the iPad, which on its own triggered the Bring Your Own Device (BYOD) trend in enterprise computing.

In a mobile age, Benioff now sees three key priorities for Salesforce; “we want to be feed first, we want to be mobile first and we want to be social first.”

Regardless of Benioff’s vision, not everyone will go mobile which is something that Peter Coffee acknowledges.

“The laptop will occasionally be used to author creative work like a presentation or to deal with something that needs a large screen like pipeline analysis,” says Coffee.

Marc Benioff though is adamant. “Honestly I don’t ever want to use a laptop again,” he told his audience.

It will be interesting to see how many business leaders follow him in abandoning their desktops and portable computers as the post-PC era of computing develops.

The Digital Fallacy

Businesses don’t need a Chief Digital Officer, it’s one of many fallacies about the digital economy

Earlier this week Telstra held their 2013 Digital Summit in Melbourne, a curious event featuring  a bunch of US based experts to tell the locals what they should have already known about the changing business landscape.

The reversion of Australian business to a 1950s colonial cringe is worth a blog post in itself, however more interesting was the assertion that every organisation should appoint a Chief Digital Officer.

A Chief Digital Officer is an idea based on the flawed fallacy that digital technologies are unique and separate from other business functions.

The Chief Electricity Officer

Digital is simply the way business is done these days and has been since the electronic calculator appeared in the 1970s – having a Chief Digital Officer is akin to appointing a Chief Electricity Officer.

The role of a Chief Digital Officer is an idea usually pushed by social media experts and other fringe digerati that perversely undermines the very roles they are trying to promote.

By putting “digital” into its own organisational silo, the proponents of a Chief Digital Officer are actually advocating marginalising their own fields. It’s also counterproductive for a business that follows this advice.

The real challenge for those pushing digital technologies is putting the business case for their particular field and in most cases, such as social media or cloud computing, the argument for adopting them is usually compelling in some part of every organisation, but it shouldn’t be overplayed.

More than just marketing

An aspect heavily overplayed in the commentary around the Telstra Digital Summit was the role of social media with most people focusing on branding and marketing.

If you believe this is the extant of ‘digital business’, then you’re in for a nasty shock as supply chains become increasingly automated, Big Data makes companies smarter and the internet of machines accelerates the business cycle even more. Social media is only a small part of the ‘digital business’ story.

Over-stating the role of individual technologies is something that’s common when people have books or seminars to spruik – which, funny enough, is exactly what Telstra’s international speakers were doing.

It’s understandable that an author or speaker will overstate the benefits of their project, but it doesn’t mean that you should fall for the fallacies in their arguments.

Do business awards help companies?

Winning business awards are great for helping a company focus on its operations, but they aren’t necessarily great for growing an organisation.

The latest clip on The Decoding the New Economy YouTube channel is an interview of Cameron Wall of Melbourne’s C3 Business Solutions about business intelligence, data analytics and whether winning awards helps a company.

Cameron’s business has been a successful enterprise having grown to over a hundred employees since being founded seven years ago.

As a high growth business, the company was listed in the 2010 BRW Fast Starters list, interestingly though Cameron didn’t see a great deal of benefit from winning the accolade.

“I look at it as being a credential, just because you get the credentials it doesn’t necessarily mean you can charge a premium in the marketplace,” Cameron says. “It all helps in terms of recognition, but we haven’t been thrown anything as a result of the award.”

On the other hand the company has won the BRW Best Australian workplace three years in a row and Cameron has found this improved the business’ recruitment.

“Being in a service company you often hear ‘people are our greatest asset’, basically they are our only asset.” Cameron says, “Having a great place to work is really important for us.”

Cameron found that after winning the great place to work that the flow of resumes increased. “Some of the benefits of that were a lot of people applied to join C3 and it makes the recruitment process a lot easier.”

How business awards do help companies is in reviewing their operations and practices as Cameron explained, “using the great place to work process is a great way to understand if we’re trending upward, downward and where we’re going.”

“It was a difficult award to win, as you get probed by every angle.”

With the growth in data science, business analytics and Big Data companies like C3 are going to need good employees in the global race for talent. Having a reputation as fine place to work is a good way of winning the global race for talent.

Trophy image by RoyM through sxc.hu

Google, Facebook and the Silicon Valley paradox

The paradox of Silicon Valley is cloud and social media companies want us to use the products they won’t use themselves.

One of the great advertising campaigns of the 1980s featured entrepreneur and Remington Shaver CEO Victor Kiam telling the world “I liked the product so much I bought the company”.

The modern equivalent of Victor Kiam’s slogan is “eating your own dogfood” where businesses use their own products in day to day operations. It’s a great way of discovering weaknesses in your offerings.

One of the paradoxes of modern tech companies is how they don’t always eat their own dogfood when it comes to their business philosphies – they expect their customers to take risks and do things they deem unacceptable in their own businesses and social lives.

The best example of this are the social media services where founders and senior executives take great pains to hide their personal information, a phenomenon well illustrated by Mark Zuckerberg buying his neighbours’ houses to guarantee his privacy.

Just as noteworthy  are the policies of Google’s IT department, for past five years most tech evangelists – including myself – have been expounding the benefits of business trends like cloud computing and Bring Your Own Device (BYOD) policies.

Now it turns out that Google doesn’t trust BYOD, Windows computers or the Cloud, as the company’s Chief Information Officer, Ben Fried tells All Things D of his reasoning of banning file storage service Dropbox;

The important thing to understand about Dropbox,” Fried said, “is that when your users use it in a corporate context, your corporate data is being held in someone else’s data center.”

This is exactly the objection made by IT departments around the world about using Google’s services. It certainly doesn’t help those Google resellers trying to sell cloud based applications.

Fried’s view of BYOD also echoes that of many conservative IT managers;

“We still want to buy you a corporate laptop, get the benefits of our corporate discounts, and so on. But even more importantly: Control,” Fried said. “We make sure we know how secure that machine is that we know and control, when it was patched, who else is using that computer, things like that that’s really important to us. I don’t believe in BYOD when it comes to the laptop yet.”

Despite these restrictions on Google’s users, Fried doesn’t see himself or his department as being controlling types.

“But the important part,” Fried said, “is that we view our role as empowerment, and not standard-setting or constraining or dictating or something like that. We define our role as an IT department in helping people get their work done better than they could without us. Empowerment means allowing people to develop the ways in which they can work best.”

Fine words indeed when you don’t let people use their own equipment or ask for a business case before you can use Microsoft Office or Apple iWork.

That Google doesn’t give its staff access to many cloud services while Facebook’s managers restrict their information on social media shows the paradox of Silicon Valley – they want us to use the products they won’t use themselves.

Back in the 1980s, Victor Kiam liked what he saw so much that he bought the company. You’d have to wonder if Victor would buy Google or Facebook today.

Building the post-agile workplace

Yammer founder Adam Pisoni believes the Microsoft owned business could be then next phase of the industrial revolution.

“I personally believe we haven’t seen a major change in how companies work since the industrial revolution,” says Yammer co-founder Adam Pisoni. “We’re, I think, on the brink of a change as large as that.

Pisoni was speaking at Microsoft’s Australian TechEd conference on the Gold Coast and gave an insight into how Yammer’s development philosophy is being implemented at Microsoft since the smaller company was acquired last year.

He believes all businesses can benefit from collaborative, cloud based tools like Yammer however software companies like Microsoft are the ones being affected the earliest from their adoption.

“We sometimes joke that Yammer’s development methodology is post-Agile, post-Scrum” says Pisoni. “Because they were not fast enough and don’t respond to data quickly.”

Understanding modern workplaces

This will strike fear into the minds of managers who are only just coming to understand Agile and Scrum methodologies over the traditional ‘waterfall’ method of software development.

“We focused primarily in the past on efficiency,” states Pisoni. “In many ways things like scrum attempt to make you more agile but still focus on efficiency. Everyone is tasked based and hours and burn down points and all that”

“The name of the game now is not efficiency, it’s how quickly you can learn and respond to information.”

“Yammer is less of a product than it is a set of experiments running at all times. We take bold guesses about the future but then we try to disprove our hypotheses to get there.”

“So we came up with this ‘post-agile’ model of a small, autonomous, cross-functional teams – two to ten people for two to ten weeks who could prove or disprove an hypotheses based on the data.”

“This lets us quickly move resources around to double down on that or do something else.”

Flipping hamburgers the smart way

Pisoni sees this model of management working in areas outside of software development such as retail and cites one of his clients, Red Robin burgers, where the hamburger chain put its frontline staff on Yammer and allowed them contribute to product development.

The result was getting products faster to market – one burger that would have taken eighteen months to release took four weeks. The feedback loops from the customer and the reduced cost of failure made it easier to for the chain to experiment with new ranges.

With companies as diverse as hamburger chains, telcos and software developers benefitting from faster development times, it’s a warning that all businesses need to be considering how their employees work together as the competition is getting faster and more flexible.

It remains to be seen if this change is as great as the industrial revolution, but it’s now that can’t be ignored by managers and entrepreneurs.

Paul attended Microsoft TechEd Australia as a guest of Microsoft who paid for flights, accommodation and food.

Why do executives see romance in the startup culture?

Many managers think startups are romantic – could it be because of the corporate lives they lead?

One of the fascinating phenomenons of the modern era is how corporate managers have appropriated the startup culture.

At the announcement of the Australian Centre for Broadband Innovation’s Apps For Broadband prizes, Foxtel’s CIO Robyn Elliot described her experience of working in a startup.

“Foxtel was once in the category of startup itself,” said Elliot at the start of her speech.

Apples and Oranges

Comparing Foxtel to a scrabbling startup in the modern sense is bizarre given the company was a well funded joint venture between News Limited and Telstra – the company being a good example of modern Australian crony corporatism rather than a risky undertaking by daring entrepreneurs.

This conceit about startups isn’t unusual among corporate executives, in the early days of Australia’s National Broadband Network it was quite common to hear NBNCo managers talk about their startup ethos – this from a company backed by around 30 billion dollars of government funding.

At one stage I interviewed for a job at NBNCo and I struggled not to start giggling when the “startup ethos of the organisation” was earnestly emphasised to me several times during the meeting.

Not surprisingly the job went to an ex-telco staffer, as did most of the team’s roles. No doubt their corporate experience was far more suited to the company’s ‘startup ethos’  than that of actually having worked in four startups. Giggling in the interview probably didn’t help either.

The romantic dreams of executives

Given most corporate staffers would curl into the fetal position and weep after two weeks of working in a real startup, why do executives indulge in the conceit that their business is ‘just like a startup’?

The answer could lie in “The Consequences to the Banks of the Collapse in Money Values” written by John Maynard Keynes in 1931.

A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him. It is necessarily part of the business of a banker to maintain appearances, and to confess a conventional respectability, which is more than human. Life-long practices of this kind make them the most romantic and the least realistic of men.

So it is for the modern corporate executive who has spent their working lives fighting for the corner office having met their KPIs and spending years cultivating their network of like minded managers.

After two decades spent writing stern memos on the use of paper clips and climbing the corporate ladder, it must be tempting for a middle aged executive to look at those funky youngsters getting billion dollar payouts after a couple of years grabbing three hours sleep a night among the pizza boxes under the desk and get pangs of what might have been…..

A harmless startup fantasy

In some many ways the executive startup fantasy is touching and largely harmless, even if it does attract sniggers and giggles from the unwashed and underpaid who’ve actually been there.

The real risk is when a senior executive tries to shoehorn a Silicon Valley startup culture into an organisation.

While most large companies could do with some of the hunger and flexibility found in smaller businesses, there’s many ways that could go terribly wrong – particularly when driven by a starry eyed romantic manager.

For most executives though, the dreams of being in a startup will remain a fantasy – and that’s probably best for everybody.

Dealing with the corporate digital divide

Does the real digital divide really exist in the business world between old businesses and new organisations?

It’s fashionable when talking about the ways different generations use computers to split users into two groups – the digital natives and digital immigrants.

Born after 1990, digital natives are believed to have an intuitive understanding of digital technologies born from never having known a world without computers.

Digital immigrants on the other hand are from an era where computers were not common outside big corporations and government departments, so most people born before 1990 had to learn to use computers.

like many similar demographic divides, the line between digital immigrants and natives is contentious and probably more unhelpful than useful.

A fascinating question though is whether corporations can be digital natives and immigrants.

One of the challenges for older corporations, the corporate digital immigrants, are the legacy business systems that have their roots in the pre-digital era. A good example of this is United Airlines which struggles under inflexible management and old aircraft which can’t provide the levels of service and reliability expected by modern customers.

A similar problem faces retailers who’ve haven’t invested in modern logistics, point of sale and online commerce systems – these businesses simply cannot compete with those who have up to date technology.

Part of this problem comes from the difficulties in upgrading both technology and management systems in complex organisations, it’s not an easy task and the cost of failure is high so it’s understandable that many businesses don’t attempt it.

In the meantime there’s the corporate digital immigrants, the more recently founded businesses that aren’t weighed down by legacy management and technology.

The problem for the legacy businesses is the digitally native companies are able to take advantage of cheap and powerful tools that older organisations struggle to integrate into their operations.

So the digital native-immigrant divide could be actually a business problem rather than one of how different generations discovered computers.

Collecting tolls on the information superhighway

The failure of Melbourne IT’s management proves that clipping tickets on the internet is not always the path to riches.

The news that internet services company Melbourne IT is looking at cutting management costs and returning cash to shareholders in the face of declining revenues doesn’t come as any surprise to observers of the firm.

In many ways Melbourne IT is a historic relic, one of the last examples of the late 1990s dot com boom where management from those heady days survived unscathed by the realities of the 21st Century.

Melbourne IT story illustrates the poor management and flaw investment strategies of the big dot com float and also illustrates the risk of under-investing in key areas, as anyone using the site or the services of its Web Central subsidiary will understand.

Both companies feature clunky sites and extremely poor customer service. For resellers and customers using the Web Central command center, the experience and technology is straight out of the late 1990s.

While overseas businesses like Rackspace, GoDaddy and Bluehost innovated and invested in their platforms, Web Central and Melbourne IT sat back and how expected their dominant position would guarantee them profits.

Much of that management complacency was born out the founding of Melbourne IT when it was spun off from the University of Melbourne to exploit the then monopoly the university’s computer faculty had on granting Australia commercial domains.

In 1998, as the dot com boom was entering its most heated phase, Melbourne IT was floated and immediately attracted anger and allegations of wrong doing – none of which was proved – as the stock debuted on the stock market at four times its listing prices which generated huge profits for the insiders who were fortunate to get shares allocated before the sale.

Melbourne IT’s huge stock valuation was based on the belief the company would exploit its dominance of the critical domain market – it was similar to other technology floats of dominant players at the time such as accounting giant MYOB in 1999 and Telstra’s spin off of its small business Commander operation the following year.

All of these stock market floats proved to be disastrous as each company’s management showed they were incapable of exploiting their privileged market positions.

Of the three, Melbourne IT’s management survived longest partly because of the riches expected to flow into the company’s coffers through Top Level Domain sales as gullible government agencies and corporates being driven by a Fear Of Missing Out overpay for new online addresses.

Now it appears ICANN’s top level domain river of gold isn’t going to flow, partly due to arrogance and management incompetence in that organisation, so Melbourne IT is now going to have to cull its executive ranks.

Steadily, both Melbourne IT and Web Central have gone from being dominant to irrelevant and provide a good case study of how poor management and complacency can squander a dominant market position.

The failure of Melbourne IT’s management proves that clipping tickets on the internet is not always the path to riches, particularly when you don’t invest or innovate.

A question of incentives at Microsoft and Apple

Incentives create a company culture as we see within Microsoft, Apple and Amazon

Ben Thompson on his Stratechery blog speculates what Apple would be like were Steve Ballmer running the company.

Thompson makes an excellent point – that Ballmer has been very good in building a company driven by incentives like salaries, bonuses and titles. It describes Microsoft very well and highlights the companies strengths and weaknesses.

Were Ballmer to run Apple, Thompson concludes, it would be a far more profitable company than it is today but it would be fading into irrelevance just as Microsoft is.

That makes sense as Microsoft under Ballmer has been able to profit from the dominant market position it built up in the late 1990s, but the company has struggled against innovative competitors or the big market shifts following the arrival of smartphones and tablet computers.

Where Thompson is on more shaky territory is citing Amazon as another example of where profit is less important than innovation;

Amazon famously makes minimal profits; Microsoft made more money last year than Amazon has made ever, yet Amazon too is far more relevant in the consumer market today than is Microsoft.

Amazon may well be more relevant to the consumer market today than Microsoft, but that’s largely on the back of a business model built on shareholders subsiding customers – something that Apple has never done.

It may well be that when investors get sick of propping Amazon up, the company’s business model will have to change. Should Amazon have a Microsoft like dominance of the online retail or cloud computing markets then customers might be in for a nasty dose of sticker shock as profits are maximised.

Ultimately incentives are what shapes a company’s culture – whether the incentives are built around stack ranking, commissions or currying favour with the founder, they will determine how the business behaves.

On running late

Is chronic lateness a trait shared by the entire tech industry?

Business Insider’s unathorised biography of Yahoo CEO Marissa Mayer is both enlightening and scary while giving some insight into the psyche of the tech industry.

Nicholas Carlson’s story tells the warts and all tale to date of a gifted, focused and difficult to work with lady who’s been given the opportunity to lead one of the Dot Com era’s great successes back into relevance. It’s a very good read.

Two things jump out in the story; Mayer’s desire to surround herself with talented people and her chronic lateness.

When asked why she decided to work at a scrappy startup called Google, which see saw as only having a two percent chance of success, Mayer tells her ‘Laura Beckman story’ of her school friend who chose to spend a season on the bench of her school varsity volleyball team rather than play in the juniors.

Just as Laura became a better volleyball player by training with the best team, Mayer figured she’d learn so much more from the smart folk at Google. It was a bet that paid off spectacularly.

Chronic lateness is something else Mayer picked up from Google. Anyone whose dealt with the company is used to spending time sitting around their funky reception areas or meeting rooms waiting for a way behind schedule Googler.

To be fair to Google, chronic lateness is a trait common in the tech industry – it’s a sector that struggles with the concept of sticking to a schedule.

One of the worst examples I came across was at IBM where I arrived quarter of an hour before a conference was due to start. There was no-one there.

At the appointed time, a couple of people wandered in. Twenty minutes later I was about to leave when the organiser showed up, “no problem – a few people are running late,” he said.

The conference kicked off 45 minutes late to a full room. As people casually strolled in I realised that starting nearly an hour late was normal.

It would drive me nuts. Which is one reason among many that I’ll never get a job working with Marissa Mayer, Google or IBM.

A few weeks ago, I had to explain the chronic lateness of techies to an event organiser who was planning on using a technical speaker for closing keynote.

“Don’t do it,” I begged and went on to describe how they were likely to take 45 minutes to deliver a twenty minute locknote – assuming they showed up on time.

The event organiser decided to look for a motivational speaker instead.

Recently I had exactly this situation with a telco executive who managed to blow through their alloted twenty minutes, a ten minute Q&A and the closing thanks.

After two days the audience was gasping for a beer and keeping them from the bar for nearly an hour past the scheduled finish time on a Friday afternoon was a cruel and unusual punishment.

This was by no means the first time I’d encountered a telco executive running chronically over time having even seen one dragged from the stage by an MC when it became apparent their 15 minute presentation was going to take at least an hour.

It’s something I personally can’t understand as time is our greatest, and most precious, asset and wasting other people’s is a sign of arrogance and disrespect.

Whether Marissa Mayer can deliver returns to Yahoo!’s long suffering investors and board members remains to be seen, one hopes they haven’t set a timetable for those results.