Saturday, April 29, 2006

 

Tom Friedmans' Video on The Other Side of Outsourcing

Like many, I found Tom Friedman's book The World is Flat interesting, timely and thought-provoking. From an educational point of view, I find his video to be useful to get students and managers who have never been to India (especially Bangalore) recently to understand the social impact of outsourcing. The video is avaiable here.

Tuesday, April 25, 2006

 

Google's Experimentation: Overcoming Competency Traps

I had posted earlier about Google's ambidexterity. One of the key features of ambidexterity is a balanced focus on experimentation and execution. We know they are good at executing (llok at their recent performance figures!). We also know that they experiment with labs, they let each Googler allocate time on a 70-20-10 basis. Now, we also know that they do selective, strategic experimentation to continually enhance user experiences. This post on Google's blog provides a peek into their experimentation practices.

In other words: there's an important role for continuous experimentation as part of strategy formation and execution. Successful companies not only capitalize on their core competencies but also figure out a way to overcome competency traps through selective, strategic experimentation.

The broader management message: Don't just focus on your core competencies. Focus also on what you are doing to overcome competency traps.

 

Nike, Google, Yahoo and Adidas

Continuing on my reflections on the link between Nike and Google with the launch of Joga community.

I saw this website that features Adidas and Google Earth. Clearly, Google wants to be linked to both Nike and Adidas (guess whose importance is higher in these relationships!).

It raises interesting issues for co-branded marketing in the network era. Specifically, how to navigate multiple seemingly contradicting links withintightly embedded networks with blurring distinctions among the roles of suppliers, partners, customers, competitors and complementors. What makes this more important is that the roles of companies change over time. A partner today may be a competitor tomorrow. A customer today may become a competitor tomorrow.

Monday, April 24, 2006

 

Corporate Blogging: Practices and Perspectives

The blogging fever has caught on.
We are steadily seeing many Fortune 500 companies with blogs. Here's are two useful sites: (1) site. and (2) site. What I find frustrating is that I have not seen any good categorization of the different corporate blogs. When I discuss blogs with managers, they are invariably puzzled:

(1) why should we blog? or encourage blog? is it not just a fad?
(2) what should be the limits? what about SEC requirements? what about trade secrets etc.?
(3) Is it an alternative to public relations and news releases?
(4) What about possible contradictions?
etc. etc.

I say that blogging is NOT one thing to all firms for all purposes. I refer them to read Naked Conversations. The book provides a good overview and nice examples. But I have not seen a good typology or taxonomy to take this idea further. Now, you may be wondering why we need a taxonomy of corporate blogs. It's simple: Not all blogs are the same nor do they have the same function, focus or objective.

Some blogs reflect individual opinions of rank-and-file managers (e.g., Robert Scoble at Microsoft) or Mike Chambers at Macromedia while others reflect more senior managers responsible for specific functions or even top management (Bob Lutz of GM or Jonathan Schwartz of Sun). Some blogs are active communities inside companies (Microsoft Channel9 or Googlers' blogs). Some are product or business specific blogs (e.g., Google Enterprise blog) while others are focused on a particular theme such as mashups or TV entertainment across a wider community not limited to a single company.

There are strong feelings about blogging. Jonathan Schwartz of Sun remarked:

“We've moved from the information age to the participation age, and trust is the currency of the participation age. Companies need to speak with one voice and be authentic. Blogging allows you to speak out authentically on your own behalf, and in the long run people will recognize that. Do it consistently and they trust you.”
There seems to be some recent interest in showing the value of corporate blogging. Some are beginning to compare financial performance of the companies with blogs with those that do not have blogs to see if there are strong financial performance differences. I caution against such simplistic categorization of performance effects as management research is full of ill-conceived studies that sought to establish links between management actions and financial performance. Simple categorization such as bloggers versus non-bloggers mask many confounding effects; the results may be more of an artificat of the study design than anything more specific about blogging.

So, let us not swing for the fences trying to establish financial performance efefcts of corporate blogging right away. Let us instead develop a typology of blogs and link them to more intermediate performance effects as customer perception of trust and brand preferences and market share increases. Some blogs may have different goals than market share or customer trust and we should link those to appropriate constituencies as such.

I believe that it is more than a fad but we need to understand it in some detail. Just as not all e-commerce sites have the same business model logic, not all blogs are the same.

A typlogy of blogs with appropriate performance metrics for each type will go a longway.


Thursday, April 06, 2006

 

Google in Real Estate?

I am not surprised that Google will want to play in the real-estate space. Google Maps, Google Local are good logical building blocks. It looks like they are quietly moving into this space. I found this blog to be a useful peek into what Google is trying to do.

Wednesday, April 05, 2006

 

Apple-Intel Link and Boot camp: Choosing the OS on a Mac



Lots of eyebrows were raised when Apple announced in June 2005 that it will use Intel chips. Today (April 5, 2006) Apple announced Boot Camp (which caught a lot of Apple Watchers off guard):

CUPERTINO, California—April 5, 2006—Apple® today introduced Boot Camp, public beta software that enables Intel-based Macs to run Windows XP. Available as a download beginning today, Boot Camp allows users with a Microsoft Windows XP installation disc to install Windows XP on an Intel-based Mac®, and once installation is complete, users can restart their computer to run either Mac OS® X or Windows XP. Boot Camp will be a feature in “Leopard,” Apple’s next major release of Mac OS X, that will be previewed at Apple’s Worldwide Developer Conference in August.

“Apple has no desire or plan to sell or support Windows, but many customers have expressed their interest to run Windows on Apple’s superior hardware now that we use Intel processors,” said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. “We think Boot Camp makes the Mac even more appealing to Windows users considering making the switch.”
Shaw Wu, an analyst commented that this could be major game changer:
We believe this is a big deal and potentially could be a significant game changer," Wu worte. The analyst said a key reason why Apple has not gotten more "switchers" is likely due to a lack of strong Windows compatibility, but now with Intel processors and chipsets, they are able to offer full compatibility with Windows XP on Mac.
"Additionally, with support for both EFI and BIOS for booting, Microsoft Vista will also be supported on a Mac," Wu added. "We view this as an incremental negative for HP, DELL and other PC makers as Apple will be able to garner additional PC market share."

What I found interestign was: (1) Apple has no desire ..to sell or support Windows.. (2) this boot camp feature will be incorporated into the next release. So, Apple is serious about making its hardware accessible for those running Windows.

As Walt Mossberg of the Wall Street Journal remarked on his column:

You can't run both operating systems at the same time. Switching between the two requires you to restart the Mac; the operating system you're not using is shut down. That makes switching a little slow, but it also means that each operating system runs like a separate computer, with full control of the hardware. This allows Windows to run at full speed and protects your Mac files from the effects of Windows viruses.

With Boot Camp, you could choose to run a Mac solely as a Windows machine, with good results. But Apple doesn't expect many people to do this. Instead, it assumes Boot Camp users will still use the Mac operating system and Mac software 90% of the time, switching into Windows mode only to run a few Windows programs. Some customers may never use Windows on their Macs, and just see Boot Camp as a sort of insurance policy that allows them to switch to the Mac without fear that they'd lose future access to Windows programs.

First Apple made itunes work on Mac and PC. Then, it switched to Intel chips. and Now, it offers Boot Camp and lets the consumer choose which OS to run. Macbookpro may become attractive for many users, I think--especially those that never considered giving up their Windows operating system. Well.. as long as viruses do not multiply or worm their way from the Windows to the OSX partition!

Apple shares surged about 10% on this news.

The big question is: Will Bob Scoble of Microsoft buy a Macbookpro?

The bigger question is: Will Apple let third-party hardware vendors such as Dell, HP, Sony to offer both Windows and OSX or will it keep that closed?



 

Learning from Soccer: 'Official' verus 'Unofficial' Partnerships


The Worldcup Soccer frenzy is bringing a new dimension to the theme of partnerships. We all know there are 'official' sponsors that pay literally millions of dollars to promote and be associated with big sports events such as Olympics and Soccer.

So, what does the World Cup 2006 bring? Well for a start: The FIFA World Cup official website is sponsored by Yahoo. I do not how much they paid for the sponsorship but I imagine it is significant. The official footwear sponsor is Adidas (not surprising since the event is held in Germany!). You can even personalize the wesbite by 'selecting your favorite team.' Yahoo has also created a toolbar for Internet Explorer. And needless to say: you can get live updates on your mobile phone.

So, what makes this interesting from a partnership point of view? It's not the official
list of sponsors, which is impressive (Gillette, Coca-Cola, Deutsche Telekom, Master Card, McDonald's and others). It is how the non-sponsors are jockeying to create websites to allow the fans to create experiences that take advantages of some of the new functionality of web 2.0. Look at what Nike and Google are creating with Joga. The website indicates:
"Joga is a place to meet other soccer players, share your own soccer experiences and enjoy photos and videos from around the world."
Joga is an online community created by Google and Nike for anyone anywhere in the world who shares a love for soccer, the world's most popular sport. Joga is about getting to know your fellow fans; creating games and clubs; accessing athletes from Nike; and enjoying video clips and photos (you can even upload your own). You can strengthen existing friendships and begin new ones, join a wide variety of professional athletes and soccer communities, and even create your own to discuss soccer, exchange tips on the coolest moves, browse through various pitches worldwide, and plan your next game.

But most of all, Joga is about "Joga Bonito" -- Portuguese for "play beautiful." Are you ready to start down the path of soccer bliss? Join us, and show the world what playing beautiful means to you
It's worth watching how much fans embrace the unofficial Joga site (by uploading content and creating social network connections with other fans with the same favorite team or opposing teams) as opposed to the official FIFA Site. If fans indeed embrace Joga, will Nike stop spending millions of dollars on sponsored advertising and develop new robust advertising models linked to Google?

This is clearly a contest between Adidas and Nike for capturing the mind of the soccer fans for their products (footwear and clothes). It is equally a contest between Google and Yahoo.

Beyond soccer, it is a contest between official sponsorship and unofficial sponsorship--both aimed at co-opting the fans in co-creating the content and delivering a personalized online experience on the network using multiple channels.



Sunday, March 26, 2006

 

Sun: Network is the Computer

on-demand computing: Sun's take on it.

 

Network as the Locus of Innovation

One of the big challenges of the network era is to understand the locus of innovation. It's no longer inside corporate hierarchy. It's in the network through a complex network of relationships. And this is where new models of innovation are emerging.

An article in today's NY Times illustrates how companies are innovating by tapping into the collective IQ and expertise of people. The new source of value creation is economies of expertise. This included product knowledge, process knowledge and service knowledge. More importantly, it's about reuse of knowledge with high leverage.

Some of the experiments underway today in the world include:

1. Rite-Solutions. The NY Times article illustrates their ide well..
At Rite-Solutions, the architecture of participation is both businesslike and
playful. Fifty-five stocks are listed on the company's internal market, which is
called Mutual Fun. Each stock comes with a detailed description — called an
expect-us, as opposed to a prospectus — and begins trading at a price of $10.
Every employee gets $10,000 in "opinion money" to allocate among the offerings,
and employees signal their enthusiasm by investing in a stock and, better yet,
volunteering to work on the project. Volunteers share in the proceeds, in the
form of real money, if the stock becomes a product or delivers savings

2. InnoCentive. This is a web-based community matching top scientists to relevant R&D challenges facing leading companies from around the globe. It also has an online forum enabling major companies to reward scientific innovation through financial incentives. It matches solution seekers with problem solvers.

I will post other examples here later as I try to develop a typology of locus of innovation in networks.

Saturday, March 25, 2006

 

Microsoft Origami



Here is a preview of what the product looks like in use. Th evideo in that link is a good illustration of the use.

this is another example of blurring boundaries across devices, functionality, size, operating systems, portability, applications. etc.

Will this be the next ipod? or is it enterprise-focused? May be hospitals, retail stores, shopping buddy in supermarkets... Worth watching when the products hit the market later...

 

Google Local (with Ads as an Experiment)



Selective Ads on Google Local as one would expect..
how long before we see it on Google Mobile?? Reinforces my point about the dynamics of ambidexterity.

As Shimon Sandler says in his blog:

Wanna see it? Go to Google Local and
type in the search box, “
booksellers
nyc
”. You should see a little coffee cup in addition to the little red
ballons. Click on the coffee cup, and an ad appears for
Barnes & Noble with their logo,
hyperlink, street location, and phone number. Sweet, huh?

 

Adobe: An example where blogging helps (but is it clear cut?)

People often ask me: "when does blogging from a company help customers?" There are many different instances--most often to quell rumors.

I have always felt that direct blogs by engineers working on a project always help so that the customers know about the product and services. Here is a very good example of what Adobe is saying about their products that run on Apple with the Intel microprocessor.

Notice the legal disclaimer on the blog: [The views expressed in this blog are my own and do not necessarily reflect the views of Adobe Systems Incorporated.]

Has Adobe publicly commented on this? What if the blog contradicts it? Will it affect Adobe stock movement? Those are thorny and messy issues.

We are in the early days of blogging as streams of conversations in the dynamic marketplace.

 

Emergent Ecosystems for Next Generation Business Innovations


My colleage Bala Iyer and I have been working on the concept of emergent ecosystems as a central concept to understand the network era. Our ideas are that:

1. Business requirements in the industrial era led companies to form ecosystems through alliances and partnerships through formal mechanisms (minoroty equity investments; joint ventures, joing marketing, joint R&D and so on). These resulted in designed ecosystems as different companies formed their set of linkages over time. Iansiti and Levin's book on the Keystone Advantage is a good reference. Business and academic publications have long focused on such ecosystems as ways to understand how companies create new capabilities and capture new sources of value. Researchers have used ex-ante assessments of how such designed ecosystems could create value through the lens of stock market reactions to the formation of joint ventures (see my work published in 1991 as an example).

2. Web 2.0 (especially mash-ups) creates possibilities that complement those formal relationships. And Web 2.0 is becoming real through creative efforts of many that are creating new and varied functionality. Links are formed as third parties innovate using data and applications from others to create new functionality. Bala Iyer's blog has pictorial representation of such mashups based on data assembled in the programmableweb site. These mashups create not designed ecosystems (through formal agreements between two or more companies) but emergent ecosystems through creative repurposing of data and applications. We need new lenses to understand the formation of such ecosystems as well as assessments of their value and impact. My colleagues and I are working on different ways to represent the dynamics of emergent ecosystems as well as assessing their impacts.

3. It is easy to dismiss many mashups as fun, playful creations devoid of any future business value (see a recent NY Times Article on how different venture capitalists are betting on this trend). More important: we need to understand the potential role of such mashups in creating new business innovations. What do sites such as housingmaps and zillow do to change the business landscape of real-estate? We need to understand their potential roles: Do they eliminate friction and ease commerce on the web as ebay did? Do they create one-stop shopping as Amazon did? and so on. In other words: not all mashups are the same (jus as not all websites are the same!). Richard MacManus offers a classification of Mashup business models; it is a good start. What we are trying to do is to come up with a classification that is based on the rigors of taxonomies reflecting underlying dimensions such that the models are mutually exclusive and collectively exhaustive (at least for now). More important: web 2.0 does not seem to have the frenzy of get-rich-quick through flipping companies through IPOs. Chris Anderson of the Wired Magazine gives his reasons why this boom is different.

Experimentation has just started.



4. It is clear that some companies such as Amazon, eBay, Yahoo, Google and Microsoft have started along the path of trying to understand how mashups enhance (and potentially destroy) their current offerings. Amazon seems to be building up the basic infrastructure to migrate their business model from e-commerce through books to something much broader and deeper. I find Microsoft's moves in this area interesting as they have so much to lose if they do not migrate their business models away from the physical world offerings. Track what these companies are doing to let the innovation community build creative, useful business models.

Mashups are more than creations in technology playpens. They could unleash emergent ecosystems that may shape how we craft successful strategies using the functionality of web 2.0.

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