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.

Twitter’s curse of management

The story of how hashtags came to Twitter shows the greatest barrier to the company’s success is its management.

Today Twitter celebrates the tenth anniversary of hashtags.

What’s notable about the story is how Twitter’s management thought hashtags were a ‘nerdy idea’

Twitter has been consistent in ignoring its user community despite every successful feature of the service coming from the platform’s grass roots.

It’s hard not to think Twitter’s greatest barrier to success is its leadership.

 

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.

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.

Innovating American government

The Trump Administration promises a lot from the Office of American Innovation. Can it deliver?

On Monday President Trump signed into existence the White House Office of American Innovation, an agency intended to “bring together the best ideas from Government, the private sector, and other thought leaders to ensure that America is ready to solve today’s most intractable problems.”

While appointing his son-in-law, Jared Kushner, to run the office is less than ideal, an agency that brainstorms ideas to transform government isn’t a bad idea.

There are limitations though, former Obama Administration tech official Tom Cochrane warns government is a very different beast from running a campaign.

In the government you say ‘I have a problem’ and it’s ‘let’s write out your requirements, here’s your six month procurement process and you can only use these thirty-three vendors who may be substandard or no good and the only reason they are on the list is because they understand how the contracting process works.’

That is just the tip of the iceberg of the challenges you face when you go into government.

Cochrane was only talking about managing websites and software while Trump and Kushner’s objectives are clearly more ambitious and, dare one suggest, somewhat driven by the neo-Liberal ideology that the private sector and markets hold all the answers to humanity’s’ problems.

How radically reforming government will go under the Trump Administration remains to be seen although the early failure with health insurance changes doesn’t bode well.

While the UK’s Government Digital Service and Australia’s Digital Transformation Office were largely confined to changing the delivery of public sector services, their remit seems somewhat closer to Kushner’s so it’s instructive reading the lessons from Paul Shetler who worked at both agencies.

His view is in the United States there’s a lot of opportunity on the digital transformation front.

They do have a lot of potential there. I do think the new administration is more likely to do something big to fix things than perhaps the Obama Administration was, because they are talking about national infrastructure.

If you to the United States it’s shocking, the physical level infrastructure is falling apart and on a digital level things are pretty much the same, if you look at the government websites many of them look like they are from the 1990s and they all look and act differently.

The US though has its own complexities with government being far more devolved and ‘hands off’ than the UK or Australian Federal governments, not to mention the tricky political environment the Trump Administration is faced with.

Possibly the biggest challenge Kushner’s office will face is the question of leadership. Shetler points out pushing change through government agencies requires decisive action.

In the UK, we didn’t focus on consensus we focused on getting things done. When I first met with Francis Maude he said ‘this is not a change management process – this is transformation.”

One of the major reasons why the UK was a successful as they were was because Francis Maude was the minister for five years. It became clear he was going to see this through and if you were going to fight, you were going to lose. People got into line.

So for the Trump Administration and Jared Kushner, the success of the Office of American Innovation is going to lie on how well they can lead and drive the process.

Given Donald Trump’s temperament and way of doing things, there’s no doubt he’ll take decisive action however bringing along disparate stakeholders and sectors of the community – not to mention deeply embedded interest groups – is going to take more than quickly Executive Orders or 3am tweets.

As Tom Cochrane and Paul Shetler observe, changing the direction of governments is not an easy task and it takes persistence, determination and vision.

History will be watching how well Trump and Kushner succeed.

Futureproofing your business

Having a global mindset and maintaining a lean operation are the keys to small business success

As part of the Meeting the The Future Head-on event in Sydney tonight I thought it may be worthwhile to list down the key points I’ll be making about future proofing businesses in these times of change.

Reading the Jobs for NSW report, it’s telling that 70% of the state’s jobs are in inward facing industries and for the main part they are losing competitiveness. That leaves them exposed to international competition and automation.

It’s easy think that many domestic services business – which make up the bulk of Australia’s small business sector – are immune from competition but the example of how Uber has upended the taxi industry is an example of how even the most protected sectors are still vulnerable.

Focus on the customer

Over the last twenty years Australia has sleep-walked into becoming a high cost economy and most Australians still seem in denial about just cripplingly expensive the country has become.

Four years ago this blog posted on how Sydney was only second to Zurich as the most costly place in the world to base a startup.

There’s nothing wrong about being as expensive as Switzerland or Germany or Japan, but to compete globally it means offering high value goods and services. The easiest way for a smaller or high growth business to do that is to focus on providing stellar customer service.

Being better than the bloke next door is not good enough, that service has to compare with the best in the world in your sector.

Keep the business lean

Yesterday’s post looked at how corporations are outsourcing, the same applies to smaller businesses. Anything that doesn’t directly involve customers should be outsourced or automated.

For smaller businesses, shifting to modern payment, banking and accounting systems is relatively straightforward and setting up automation within those applications is easy.

Similarly any employment should be virtual unless it is directly involved in serving, supporting or selling to customers.

Adapt quickly

Not only is it important to keep the business lean financially but also in mindset. In recent years the tech startup community has adopted the Lean methodology and adapted it to their much volatile world.

That startup thinking is useful for non-tech businesses as it encourages a company to be far more responsive to market or economic shifts along with identifying product lines or ideas that aren’t performing.

Invest in the business

One of the biggest weakness for Australian businesses of all sizes is they are undercapitalised – even the biggest businesses tend not to retain profits and give them back as dividends to shareholders.

From a small business perspective this is understandable as the high cost of living in Australia means proprietors have to pull out an income to pay their million dollar mortgages in Sydney and Melbourne.

However what this does mean is that businesses are chronically undercapitalised resulting in them not spending enough on equipment, technology or staff training.

If you’re making a profit, try to put as much back into the business as possible and if you need more find an investor who shares your vision for the venture.

Looking global

Probably the most depressing thing about Australia in 2017 is just how insular the nation’s economy has become in the last twenty years. In New South Wales export related jobs have fallen from 32% of the overall workforce to 29% and the slight growth in tradeable services is entirely due to the education sector.

Even if there’s no intention to export, understanding the global trends and benchmarking performance against international leaders is one of the best safeguards for a business wanting to survive over the next twenty years.

Confessions of a corporate axe man

Corporate axe man Rob Gaunt has some bad about the future of work in his book Eliminate, Automate, Offshore.

What does the future of work really look like? Management consultant Rob Gaunt has some bad new for those looking forward to a future of leisure.

In his book Eliminate, Automate, Offshore; Gaunt looks at how the modern workplace is changing and the priorities of managements and boards in a competitive, globalised world.

Gaunt, who describes himself as a ‘corporate axe man’ warns the reader “you may not approve or like what I do, but that doesn’t mean it isn’t going to happen.”

To start the book, Gaunt gives a potted history of automation in the workforce and how processes can be improved by better management and new technology. He cites his local council garbage collection service which not so long ago would have required eight or nine workers per truck now only needing two.

This trend is coming to the rest of the workforce, Gaunt warns, adding that many of those jobs that can’t be automated can be outsourced.

“When I walk into an open plan office, I look and listen to the activity; if the overwhelming noise is of keyboard strokes rather than human voices, it’s a good clue that much of the functions being performed aren’t location dependent.”

Gaunt goes on to describe how effective outsourcing works with an emphasis on the client having to document their processes before shifting functions or departments to outside contractors as well as the importance of properly scoping and understanding an agreement.

Towards the end of the book, Gaunt examines what roles are likely to survive in higher cost economies along with the skills today’s children are going to need if they are going to avoid being ‘digital roadkill’ in an automated society.

Overall the book is a good read to understand the direction of today’s workforce and the factors driving it. It isn’t a pretty tale.

If anything; Eliminate, Automate, Offshore may be somewhat optimistic about the effects on the skilled trades, professional and managerial sectors as Gaunt probably underestimates how robotics and artificial intelligence are advancing.

Should you read the book, you may want to give your kids – and their teachers – a good talking too. The axe man is ruthless and he’s coming for many of our jobs.

Meeting the future head on

What lies ahead for business is the topic we’ll be looking at the Meeting the Future Head-On panel

What can businesses do to prepare for an exciting but challenging future?

As part of the New South Wales Government’s Back to Business Week, I’ll be on the Meet the Future Head-On panel looking at the future of business and work.

Facilitated by Jo Kelly, Director of People, Place and Partnership, the seminar will look at local and global business changes and what they mean for small to medium companies.

The keynote speakers are Terry Rawnsley – Principal & Partner of SGS Economics and Planning – who’ll discuss his company’s analysis of the economy in the year 2026, and Karen Borg – the Chief Executive Officer of Jobs for NSW – with an overview of the state’s Jobs for the Future report.

Joining me on the panel will be Paul Fairhead, the Managing Director of Huddle; Jost Stollmann, the Executive Director of Tyro Payments and Marianne McGee, the owner of Allis Technology.

Tickets for the 6pm event on March 1 at the Sydney International Convention Centre are free and can be booked through Eventbrite.

Come along and have your say. Look forward to seeing you there.

When is a Chief Digital Officer needed?

The contrasting attitudes of Sydney, Melbourne and Brisbane towards the need of a Chief Digital Officer tell us much about how that role fits into an organisation

Last week the City of Sydney and councillor Jess Scully came under fire for an apparent backflip about the need for a Chief Digital Officer.

Scully, who was elected at last year’s council elections, told InnovationAus “the idea of a CDO or chief innovation officer seems a little bit redundant” a day before the organisation advertised for ‘chief, technology and digital services officer’.

To be fair to Scully, the roles being advertised by the City of Sydney were not truly CDOs in the way Brisbane, which has a small business focus, and Melbourne’s city councils have appointed them however it raises the question of whether Scully is right that an organisation doesn’t need a Chief Digital Officer.

As with most questions of this nature, the answer seems to be ‘it depends’. A key part of that discussion is where a CDO sits in an organisation. If they are senior executive or even board role, then it’s likely they are going to come into conflict with other c-suite managers such as the COO and CFO.

What’s worse, such a conflict in the c-suite can mean digital issues can be seen as ‘belonging’ to the CDO and not other key business units, which can only be to the detriment of the organisation.

There’s an argument too that the changes to organisations is so great from the changing economy and emerging technologies that responsibility of understanding and dealing with these changes is the role of the CEO and the board.

Where a CDO can be very effective is being an advocate for change and a trusted adviser to senior management, however even there risks lie as identified by Paul Shetler who found the siloing of agencies within the Australian Public Service meant it was very hard to effect any change in the face of resistance from an organisation’s vested interests.

It seems from the story that the City of Sydney has chosen an advocate and support role for the digital officer position, rather than formalise a CDO position who becomes a figurehead for the organisation’s digital evolution.

For a CDO or any technology advocate to be effective, there has to be support from the board and senior management. A technologist can only drive change if they have a mandate from the top.

Even then in some organisations the culture may be so factionalised that the response to change and drive for digital transformation has to come from the existing powerbrokers and a CDO could be at best a hindrance and even obstruct the process.

So the City of Sydney and Jess Scully aren’t wrong in not having a Chief Digital Officer, and neither are Melbourne and Brisbane for having one, it’s a deliberate decision by the various managements to choose the structure and roles that works best for their organisation. Driving change though always remains the responsibility of the board and the CEO they appoint.