Decoding the new economy

GE’s Predix predicament – an industrial giant finds software is hard

GE’s IoT predicament illustrates just how complex the engineering and management challenges of the Internet of Things really are.

Industrial giant General Electric is finding software is hard, reports Business Insider.

The company, which former CEO Jeff Immelt declared was a ‘digital industrial company’ is finding its Predix software system and associated cloud services are far more complex and difficult to manage than expected.

Back in 2015, I toured the head office of GE Software outside of Silicon Valley and interviewed the division’s boss, Bill Ruh.

Ruh was upbeat about the internet of things – or Industrial Internet in GE’s terminology – with an estimate the IoT was worth $14 billion to the company as it found new efficiencies and markets.

Today that vision’s looking a little tarnished as the company struggles with a 25% share price drop and a self imposed ‘time out’ on Predix’s development.

GE’s IoT predicament illustrates just how complex the engineering and management challenges of the Internet of Things really are.

The software needs of a sensor in a train brake pad are very different to that of fuel pump in a jet engine or the blade controllers of wind turbine.

Added to that is the challenge of organising, storing and securing the information these devices collect. This is the main reason why GE is moving its data management services to AWS and Microsoft Azure.

That a company with the resources and top level commitment of GE is struggling with this underscores the complexity of the internet of things. That complexity is something every IoT advocate and connected device vendor fails to consider at their, and their customer’s, peril.

Clash of car cultures

The partnership break down between Ford and Google shows how hard it can be for conflicting cultures to work together

With tech companies piling into the automotive industry – with varying results – it’s not surprising the established auto manufacturers are looking at making alliances with their potential Silicon Valley competitors.

Ford’s alliance with Google was one of the most promising in the sector, however it fell apart in a classic clash of cultures as Automotive News reports.

One of the key differences in the cultural crash was the priority of the two businesses – for Ford this is about the future of the company while for Google autonomous vehicles are just another moonshot.

Coupled with that, Ford are locked into their traditional products and have a sceptical Wall Street to keep happy as Automotive News describe when the two company’s CEO’s met.

In early December 2015, Fields came to Silicon Valley to discuss the deal with Google co-founder Sergey Brin. In a region where there are so many electric cars that office workers often argue over charging stations to plug in their Teslas and Nissan Leafs during the workday, Fields showed up at Google with an army of staffers in a fleet of Lincoln Navigators. Sources said Fields and his team were armed with a plan to make a big splash out of the partnership news, and much of the discussion centered around making an impression on Wall Street.

With Google being generally secretive about their ‘moonshot’ programs, it’s not surprising Sergey Brin and his team were perturbed by Ford planning to make a big announcement about the partnership. Had the auto maker done its due diligence, their delegation would have been a lot less ambitious and lot more circumspect.

Ford’s casting around for tech partners also illustrates the management didn’t understand the tech industry’s politics and dynamics, not only do they have a long standing agreement with Microsoft on their Sync product but they were also touting an alliance with Amazon to incorporate Alexa into their cars.

While there’s undoubtedly some revisionism in the Automotive News story – there’s always some airbrushing of history when a new CEO takes over – the tale does illustrate the difficulties facing business owners and managers when building alliances with others who don’t necessarily have the same objectives.

A clash of cultures is always tough to overcome and that’s often the biggest challenge facing industrial giants like Ford as they deal with a rapidly changing world.

The myths of dead brands – busting disruption stories

Blockbuster, Nokia and Kodak are cited as victims of digital disruption. Things however are not so straightforward.

“These three brands have one thing in common – they’ve all been destroyed by digital disruption,” says one business commentator in a recent presentation.

He cited three names; Kodak, Nokia and Blockbuster.

It’s a nice, and often repeated meme, which is only really true of Blockbuster which failed to adapt to a changing market and could be a perfect example of a transition effect although some don’t buy the digital disruption reason for the company’s demise.

Giving lie to the idea the company was a victim of Netflix’s rise, a former Blockbuster executive puts the chain’s bankruptcy down to management not understanding the company’s role in the market, and that it was in decline long before the streaming service’s arrival.

A more fundamental problem with the statement is both Nokia and Kodak are still in business too, the latter having come out Chapter 11 financial in late 2013.

Finland’s Nokia is somewhat more complex than Kodak or Blockbuster, having been founded as a paper pulp mill in 1865.

The company became a global brand thanks to being a leader in mobile phones prior to the iPhone disrupting the market but the name faded as the Apple and a new breed of East Asian manufacturers came to dominate the market.

Despite fading as a consumer brand, the company is still a major player in telecommunications – being a major supplier of cellular base stations – along with a range of other technologies.

Both Kodak and Nokia are still very much alive, albeit no longer being recognised by the average consumer.

There are major lessons from both companies for those studying the effects of technological disruption on brands and businesses. Even Blockbuster’s mistakes in the face of a changing and declining market has many lessons.

Citing them as examples of ‘digital extinction’ though is untrue and almost certainly unhelpful in understanding what management can do to respond to new technology or societal shifts.

Tinny vapid crap – last week’s links

Links for last week – from Apple’s child free campus and the NBN’s coffee machines to Elton John’s take on modern pop music.

Last week was an interesting time with an appearance before a Senate Committee and a trip to regional Victoria to talk about the media and social justice.

While busy, there was time to read some fascinating articles ranging from Elton’s John’s views on modern pop music, software lawsuits and early losses in the war on ‘fake news’ through to how the shiny new Apple campus boast almost everything for employees except a childcare centre.

Parents need not apply

Apple’s new 5 billion dollar campus is the realisation of Steve Jobs’ final vision. It boasts a hundred thousand square foot gym and an attention to detail that extends to the sand used to make the windows.

But it doesn’t have a day care centre, which gives a pretty clear message to aspiring employees – if you don’t have a stay at home spouse, something pretty rare in the hyper expensive Silicon Valley, then don’t bother applying.

Thanks a latte

Meanwhile in Australia, the government financed National Broadband Network is spending half a million dollars a year on maintaining its staff coffee machines.

While the money is small change in a project recent estimates put at costing $56 billion, it is emblematic of how far from its original purpose the vision has drifted.

Facebook Fails to Tackle ‘Fake News’

The social media’s attempts to tackle ‘Fake News’ are failing dismally reports The Guardian as reactionary groups gleefully reshare and publicise anything flagged as such.

While it’s early days, this isn’t a good start for Facebook although it also illustrates how powerful filter bubbles are and the lengths people will go to spread their ideologies.

The lawyers always win

Lasts week’s ransomware scares will trigger lawsuits says Reuters, quoting several legal experts.

Unsurprisingly, it won’t be Microsoft who’ll be the target given their almost bulletproof terms and conditions but businesses who didn’t patch their systems could be liable.

Fox News’ founder passes

Roger Ailes, the founder of Fox News and one time Nixon adviser, passes a few months after being ousted from the network he created.

Ailes personified the tabloidisation of the media as Rupert Murdoch applied the model which had worked so well for him at The Sun in the UK to newspapers and television in the United States.

Many blame the internet for the click bait, sensational model of modern news reporting but the pattern was well established by the time the World Wide Web came along in the mid 1990s.

Tinny, vapid crap

Elton John weighs in on the state of pop music.

Clerks, Dying Videos and Culture Clashes: Links of the week

The race to rescue VHS tapes, how Ford lost Google and the fascinating world of London legal clerks are among last week’s interesting links.

London clerks

Inside the antiquated, but very lucrative, world of London barristers’ clerks. A fascinating a look at one aspect of the English legal profession where old traditions have conveniently merged with modern fees.

Saving VHS tapes

One of the banes of modern culture is shifting standards. As VHS tapes decay, researchers are racing to preserve the culture of the 1980s and 90s, reports US National Public Radio.

Google and Ford clash cultures

Joint ventures and business partnerships are often problematic, as Ford found in their abortive autonomous vehicle project with Google.

How your next CEO could be a robot

The path to management is changing as the connected workplace evolves, but it may well be the top jobs themselves will soon be automated.

“In 30 years, a robot will likely be on the cover of Time Magazine as the best CEO,” Alibaba founder Jack Ma said told a technology conference in Zengzhou, China, last weekend.

One of the things underestimated about this wave of automation is how AI will be applied to management, Knowledge Management expert Euan Semple makes an important point how being supervised by a bot could be a lot fairer and transparent than human managers.

In the normal course of work many people don’t see much of their manager. Too often the experience is frustrating and unhelpful. The predictability and transparency of automated systems could potentially be fairer and more effective than an incompetent, prejudiced, or bullying manager.

The news for those looking at climbing the greasy management pole through getting professional qualifications isn’t good either, reports the BBC.

For the last fifty years, getting an accounting or law degree, often supplemented by an MBA, was the best path for a management position but shifting work patterns and technology is devaluing those qualifications while it’s appearing there will be less management positions anyway.

Tomorrow’s workplace is going to look very different to that of the past half century. Those of us currently in the workforce, as well today’s kids, need to be looking closely at the skills they have for a very different world.

Tag: management

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