Society and business in the 21st Century
Twitter’s new Executive Chairman finds the service intimidating to use reports the Wall Street Journal.
With a distracted CEO juggling the Initial Public Offering of his other business, it’s hard to see how Twitter is going to get the focused management and supervision it desperately needs to maintain its valuation.
In an interview with LinkedIn founder Reid Hoffman, Google chairman Eric Schmidt describes how he managed the company’s high growth.
“In all my issues at Google, I knew I had no idea what to do, but I knew that I had the best team ever assembled to figure out what to do,” says Google – and now Alphabet – chairman Eric Schmidt in an interview with LinkedIn founder Reid Hoffman.
Schmidt’s interview is a great insight into managing fast growth companies,”almost all small companies are full of energy and no process”. While he reflects on his early days at stricken companies like Sun (“tumultuous and political”) and Novell (“the books were cooked, and people were frauds”).
Moving to Google he found all of his management skills exercised at a company with a unique culture and rapidly growing headcount.
One notable anecdote is how Larry Page kept a 100k cheque from an early investor in his pocket for a month before cashing it.
Compare and contrast that attitude with the current startup mania where by the end of that day a media release would be issued proclaiming the company to be a new unicorn on that valuation.
Schmidt’s view, like many others, is that the real key to success in the company is the people. This echoes the interview with Meltwater’s CEO earlier this week where Jørn Lyseggen described how the key to starting a venture in a new country was the first five people hired.
One great takeaway Schmidt has from his time at Google is how great companies are created through the Minimal Viable Product method, “the way you build great products is small teams with strong leaders who make tradeoffs and work all night to build a product that just barely works.Look at the iPod. Look at the iPhone. No apps. But now it’s 70% of the revenue of the world’s most valuable company.”
Ultimately though Schmidt’s advice is to make decisions quickly, “do things sooner and make fewer mistakes. The question is, what causes me not to make those decisions quickly.”
“Some people are quicker than others, and it’s not clear which actually need to be answered quickly. Hindsight is always that you make the important decisions more quickly.”
Last week at the AWS:Reinvent conference in Las Vegas, I had the opportunity to interview the company’s Global Head of Enterprise Strategy, Stephen Orban about where he and Amazon see the direction of the cloud computing market and how business practices are being reinvented.
Among the things we discussed was Orban’s seven best practices for a company’s journey to the cloud, gleaned from his own experiences in his AWS role of advising clients on adopting and his previous experiences as a technology officer at Dow Jones and Bloomberg.
Orban laid out what he thinks are the keys to success in a company heading to the cloud in his own blog post and during our conversation he expanded on his ideas which also very much reflect the changing role of the CIO or IT manager.
The first point is the IT department has to understand the business and align technology with the organisation’s objectives.
“Somebody who understands technology who can merge technology with the business needs” will be better able to win the confidence of management says Orban.
Doing that is the key to winning support from the executive suite Orban believes. Once CIOs have that trust from senior management it gives their teams the space to experiment with new ways of delivering value to their companies.
“The second thing is to provide training and education,” Orban says. “People tend to get a bit anxious of what they don’t know, particularly when it affects their jobs.”
In Orban’s experience, having informed staff makes them more open to change within the business, “with the transformation I went through at Dow Jones, most of what we accomplished was because of the people who’d been there a long term. They had the institutional memory but they were very open minded.”
One of the great benefits of cloud computing is how it lowers the costs of experimentation and development, “gone are the days when it cost hundreds of thousands of dollars, even millions, to try something.” Orban says.
Learning what works and fails is essential, he believes. But as long as there is executive support then a tolerance towards unsuccessful experiments will develop in the organisation.
Outside parties are essential to most organisation’s IT systems and Orban believes partner ecosystems have changed with the advent of cloud computing. “There’s a whole new breed of partners that have been going through this,” he says in citing ‘born in the cloud’ software developers and systems integrators who are changing how projects are being delivered.
“Creating a center of excellence is, I think, one of the key practices any organisation should invest in. You want a body of people who can institutionalise best practice within an organisation,” observes Orban.
As cloud services take away the complexity of computer systems it becomes an opportunity for organizations to rethink boundaries between the IT department and business operations.
Given Orban’s employer it’s not surprising he sees cloud computing as key to a company’s transformation however he admits that few organisations will make the jump straight into cloud services.
“Hybrid will be a part of every enterprise’s journey. Any company who’s been doing IT for any period of time will have existing investments,” he says. “Our view is that we will make it as easy as possible to create that bridge.”
“We do believe in the long run that enterprises will find they become so much more effective over here (in the cloud) they will move in that direction.
Once an organisation has its cloud strategy and experimentation culture in place then having a ‘cloud first’ policy, “it reverses the burden of proof away from ‘why would you use the cloud?’ to ‘why wouldn’t you?'”
While Orban is emphasising the Amazon Web Services view of the world where ultimately all business computing will be done on the cloud – preferably their cloud – his views illustrates the change facing businesses as they implement online technologies.
For most, the availability of easily accessible cloud computing services is an opportunity to rethink their business processes and how organisations can deliver the best products quickly to their customers.
Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his book Lethal Generosity.
Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his latest book, Lethal Generosity.
In this book, Israel’s previous works include Naked Conversations and Age of Context which were both written in collaboration with Robert Scoble, he looks at the technological and social changes affecting business and how they can adapt to a rapidly evolving marketplace.
Key to that evolving marketplace is the explosion of data offering businesses deep insight into their customers. as Scoble describes in Lethal Generosity’s introduction in talking about social analytics service Vintank;
VinTank was acquired by a big PR agency that wants VinTank to do for all sorts of industries what it has done for the wine industry. Are you a restaurant or a winery ignoring that data? Go ahead and keep doing that for a decade. Your competition won’t.
Israel illustrates the need to watch the marketplace in citing a campaign where Canadian brewer Molsons completely wrong footed an oblivious competitor, something similar to how one bank discovered a rival’s successful marketing campaign through real time bank deposits data described at the recent Splunk conference.
A customer centric outlook, not looking at competitors but focusing on what consumers want is key to success in the new economy, Israel believes. This is enhanced by technologies that allow both products and marketing to be personalised as shown in the chapter detailing how retailers and airports are using beacons and data analytics in their operations.
One good example is AirBnB, while Israel trots out the ‘biggest hotel chain’ in the world fallacy that’s pervasive among commentators, its effects on the established industry has been profound and have forced hospitality operators around the world to re-evaluate their business models.
Israel suggests the best response for businesses affected by the ‘Uberization’ of their industries is to adopt the social and analytic tools and strategies being used the upstart businesses and he provides a wealth of examples.
Tapingo, the food ordering service for US college students, illustrates the seamless experience that consumers are increasingly demanding in their shopping, business and leisure activities. Israel cites how Tapingo’s merchant partners are seeing an in-store traffic boost of 7 percent and a gross profit rise of 11 percent as a result of using the service.
Shel also illustrates some of the failures in deploying new technologies, specifically London’s Regent Street Alliance that failed due to poor execution and a failure to engage the marketplace.
One of the weakness in the book – which Israel acknowledges – is its focus on US, and specifically Bay Area, case studies. While there are some non-North American examples such as Australia’s Telstra and China’s Alipay, most of the examples cited are of companies based in or around San Francisco and Silicon Valley.
Another weakness of the book is the over-focus on Millennials or Digital Natives. While this group is important that obsession risks Israel’s message being pigeonholed amongst the noise of poorly thought out pop demographics and poor analysis that marks much of the discussion around changing tastes and habits between generations.
Israel’s point that the post 1982 generation will soon outnumber older cohorts in both the workforce and the marketplace in the near future though is an important aspect for businesses to keep in mind with the safe certainties and predictable customer behaviour of the baby boom era being long gone.
However the shift in consumer and workplace behaviour is just as pronounced among all the post World War II generations as technology and the economy evolves in the early 21st Century. Focusing on the younger groups risks missing similar shifts among older members of the community.
Ultimately though, Israel’s message is about customer service. Shel himself flags this is not new, in describing the competition between hiking goods suppliers The North Face and Sierra Designs in 1970s Berkeley.
What is different between today’s businesses and those of forty years ago is technology now allows companies to deeply understand their customers and provide customised marketing, products and experiences to the connected consumer.
For the business owner, manager or entrepreneur, Lethal Generosity is a good starting point to understand the forces changing today’s marketplace. The case studies alone are worth considering for how an organisation can adapt to a rapidly evolving world with radically shifting customer behaviour.
Big data and analytics are changing roles in the media industry, managers in other sectors should worry about the changes.
Yesterday Decoding The New Economy posted an interview with Michael Rubenstein of AppNexus about the world of programmatic advertising and being part of a rapidly growing startup.
The whole concept of programmatic advertising is a good example of a business, and a set of jobs, being disrupted.
Media buying has been a cushy job for a generation of well fed advertising executives. David Sarnoff’s invention of the broadcast media model in the 1930s meant salespeople and brokers were needed to fill the constant supply of advertising spots.
Today the rise of the internet has disrupted the once safe world of broadcast media where incumbents were protected by government licenses and now the long lunching media buyers are finding their own jobs are being displaced by algorithms like those of AppNexus.
A thought worth dwelling on though is that media buyers are part of a wider group of white collar roles being disrupted by technology – the same Big Data algorithms driving AppNexus and other services is also being used to write and select news stories and increasingly we’ll see executive decisions being made by computers.
It’s highly likely the biggest casualties of the current data analytics driven wave won’t be truck drivers, shelf pickers or baristas but managers. The promise of a flat organisation may be coming sooner than many middle managers – and salespeople – think.
New York Times writer Nick Bilton delves into Twitter’s search for a new CEO and comes up with a left of field conclusion – the company doesn’t actually know what it is.
Twitter has certainly been casting around to define itself, particularly after its stock market listing that saw it valued at over twenty billion dollars.
Bilton flags one reason why management is so uncertain about their company’s identity, that it’s directors don’t use the service themselves.
As I see it, the problems at Twitter come down to a lack of leadership and a micromanaging board.
And the churn is constant: many of its founders, chief executives, numerous product directors and other top brass have been fired or pushed out. Three of the eight positions on the current board belong to Mr. Dorsey and the former chief executives. About half of the board barely tweets.
The lack of social media credibility on the board raises another issue about how much direct industry expertise should a company’s directors have. While it’s almost certainly not desirable to have insiders dominate a board certainly some, if not the majority, of directors should have some experience in the industries the company operates in.
For Twitter though they desperately need to define the business and what its valuation really is. Even more pressing is to show how the platform differs from Facebook as the confusion of investors, users and advertisers isn’t helping.
Ultimately as Bilton suggests the direction of a business is determined by the board, it’s time Twitter found at least a few directors who at least use social media, if not have some understanding and experience in the business.
“What would be lost if we disappeared?” is the question Microsoft CEO Satya Nadella claims is driving the company’s direction in his latest memo to employees.
In the email obtained by website Geekwire, Nadella told his staff redefining the company’s culture is key to success, “we can do magical things when we come together with a shared mission, clear strategy, and a culture that brings out the best in us individually and collectively.”
That culture though is not static and Nadella is describes how the company needs to focus on helping its customers through its cloud and Windows based products.
For Microsoft this is not new, the change from a desktop and server based licensing business to one dependent upon cloud subscription services has been a huge change for the business since the iPhone was released nearly a decade ago.
The challenge for Nadella however is to keep revenues coming in as the river of gold that was Microsoft’s Windows licenses slowly dries up.
One of the biggest changes to Microsoft’s culture could be in coming to terms that it isn’t such a huge and powerful corporation any more.
