tag:blogger.com,1999:blog-64315792386767982222024-03-24T00:10:05.905-07:00StratastropheRuminations on Business, Technology and other Ephemera.Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-6431579238676798222.post-17894079317740006332012-10-18T20:19:00.001-07:002014-12-02T10:06:55.506-08:00Miscellaneous Ramblings<div dir="ltr" style="text-align: left;" trbidi="on">
<a href="http://www.apple.com/iphone/videos/">These new Apple ads</a> are great. They are product centric, yet brand conscious. How many brand's ads are simply generic product information dumps followed by a repeated tagline, image and or tune? Not these.<br />
There has already been a lot posted about <a href="http://finance.yahoo.com/news/google-delivers-3q-letdown-early-204952373.html">Google's inadvertent early earnings announcement</a> and the implications of it's less than stellar performance relative to market expectations for the last quarter. When I checked around noon today, its stock price was down as much as 9% and trading was halted. It ended the day down about 8%. Growth companies like Google bank on positive sentiment and today's announcement seemed to temper the market's past enthusiasm. That said, the top line results were actually pretty good. Revenue was up 45% to $14.1B year over year. However income missed by a large margin, coming in at $6.53 per share compared to last year's $8.33 a share. Still, an expanding top line is a great thing. If anything, today's reaction on Google shows just how much of the market trades on "anticipointment" rather than significant changes in operating performance.<br />
Microsoft is a company that has struggled with it's strategy even while posting consistent results for the past few years. Given it's past dominance in personal computing that meant investors were willing to bank on the company even as other growth ventures struggled during the economic downturn. But consistent performance in a stagnating industry eventually catches up with you. With the impending release of Windows 8 and its Surface tablet in a couple of weeks, the company <a href="http://www.nytimes.com/2012/10/19/technology/microsoft-profit-falls-as-pc-sales-shrink.html?_r=0">posted quarterly earnings today</a> and they demonstrated how far Microsoft needs to improve to once again be considered a relevant company in the tech sector. Income dropped 22% while revenue dropped 8% year over year. No doubt Window's 8 will improve short term financial results. New software releases are generally expected a benefit earnings, but much of the company's future success and market performance will depend upon new products like Surface and whether Microsoft can reinvigorate their product lines.<br />
<a href="http://www.youtube.com/watch?feature=player_embedded&v=Zxa6P73Awcg">This fabulous video and story</a> brightened my day. It's always been a dream of mine to one day shoot a feature for National Geographic. Paul Nicklen has been a National Geographic photographer for a few years. He recently won <a href="http://www.guardian.co.uk/environment/gallery/2012/oct/18/veolia-environnement-wildlife-photographer-2012-in-pictures">Veolia National Wildlife Photographer of the Year</a> award. And yet his encounter with a Leopard Seal in Antarctica was marvelous even for him. </div>
Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0tag:blogger.com,1999:blog-6431579238676798222.post-8646832265200786152009-10-29T09:51:00.000-07:002009-10-29T10:33:40.832-07:00The Net Neutrality BusDon't get me wrong. I love my cheap Internet line. I pay less than $100/month for 6Mbps downstream Internet speeds and cable TV service and it's great. I don't know what I would do without it. It would be even better if it were less expensive. But I realize that it's not as simple as that. There's an economic equation that dictates much of what happens in the market. Or at least it probably should. Here's an analogy:<div><br /></div><div>You decide you want to get into the transportation industry. Living in a small town, you spend $100,000 buying a small bus. It carries 40 people. You have a route that you've mapped out that takes roughly one hour to traverse and covers most of the town. There is perhaps one other person in town that has been making a living in the same business. If you can make eight trips a day and carry 40 people each time, charging each a quarter, you can make 80 dollars a day. Not including fuel, maintenance, insurance and other expenses, it would take 250 weeks of 5 business days, or almost 5 years, to pay off the bus. You decide that you want to pay off the bus faster so that you can invest in a better bus that carries more people. So you decide to create a special, express bus service. It stops at half of the bus stops and generally the bus is half full but it gets people to work much faster. You charge $2.00 for it. The benefit? Your passengers get to work 45 minutes earlier, giving them an advantage over others who take the regular bus. If the first two trips of each day are express trips, and each express trip can carry only 20 people due to the quicker routes that have fewer stops, then for those trips, You'll make 4 times more than a normal trip. The net? You pay off the bus in 2.7 years rather than 5. That means the new bus can be purchased that much faster and hopefully you'll be able to carry more people on one trip. </div><div><br /></div><div>But wait. Since you are one of only two bus companies in town, the city commission steps in. Since people are dependent upon your bus service and some can't afford to pay $2.00, they tell you that you can't charge different people different rates for the ride, even if they can afford it. You are excluding some people who can't pay $2.00 and still need to take the bus since you now make fewer trips at the quarter price. </div><div><br /></div><div>You keep your rates the same then and you use the same bus for almost 5 years, with no opportunity to obtain a bigger, faster one that carries more people. </div><div><br /></div><div>You are happy about this. Or are you? </div>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com14tag:blogger.com,1999:blog-6431579238676798222.post-65002524146812677492009-09-21T10:04:00.001-07:002009-09-21T14:58:15.718-07:00Net NeutralityI'm constantly amazed by the misperceptions that otherwise knowledgeable people have about certain things like Net Neutrality. For example recently <a href="http://www.pcworld.com/businesscenter/article/172316/fcc_net_neutrality_rules_are_a_win_consumers.html">this article</a> was published on the PC Week website. In it, David Coursey talks about new proposed rules that the FCC is expected to pass in October that will prohibit carriers from discriminating against different types of data traffic. Mr. Coursey says that these rules will "take away the carriers control of development of the Internet." <div><br /></div><div>He continues: "my take is that this is a great day for the Internet and it will be an even greater one when the FCC takes a formal vote. It is a win for the future in a battle against the established telecom interests as well as a move toward making the Internet a level playing field for developers.<p>Lacking these new rules, the carriers would be free to charge companies more to carry certain types of Internet traffic or to not carry it at all. There could be no uniformity between networks, meaning that an application that worked on one might not work on the others."</p><p>I'm no fan of carriers that put governors on Internet data speeds for certain customers, adopt per megabyte pricing models, or use other antiquated approaches to business. But to think that creating regulations that promote net neutrality will be a win for consumers is at best optimistic. </p><p>In the end the cost of building nationwide high speed data networks, like any capital costs associated with any business, will have to assumed. Whether this is in the form of increased charges to end users including residential and business customers or though taxes charged by the government to subsidize these build outs, consumers will pick up the tab. There's no such thing as a free lunch and we don't get modern, high speed data networks for free. </p><p>Preventing access to applications does not help carriers at all. If no content or applications are available, and carriers are certainly not positioned to develop every application or content source that anyone might ever use, no data traffic growth will ever occur. Thus there is an incentive to promote new application development all while optimizing the pricing model to encourage continued adoption of arguably the main engine of growth for carriers. </p><p>Let's let market forces determine what will prevail in this case, instead of just creating additional rules that will surely be a greater problem than a solution.</p><p>Comments are welcome.</p></div>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0tag:blogger.com,1999:blog-6431579238676798222.post-14859151220079594162009-04-01T18:41:00.001-07:002009-04-01T21:50:23.463-07:00On Heuristic LearningUnfortunately few people are receptive to the notion that they'll benefit from your foresight. That's why empowerment is such a powerful learning tool. Only by learning what one does not know can can one open oneself to someone else's mistakes. Consequently the best partnering opportunity is one in which one's partner has a similar frame of reference and similar values.Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com1tag:blogger.com,1999:blog-6431579238676798222.post-53356492969557804522009-03-21T16:45:00.001-07:002009-03-21T17:05:46.512-07:00On Self-PromotionThe brilliant writer <a href="http://www.imdb.com/name/nm0343419/">Larry Gross</a> wrote this to me recently as a result of a couple of e-mails I sent to him on art mashups and self-promotion in Hollywood:<div><br /></div><div>"The French philosopher, (recently deceased) Jacques Derrida, in a very complex discourse on Rousseau in an early book called OF GRAMMATOLOGY theorized about writing as a "supplement" to identity. What is more and more true in our culture, is that these technologies are becoming essential supplements to identity. They are devices compensating for something missing in our existences, of which, I would argue we are unaware of to begin with--there's nothing wrong with any of this--except for our radical not-being-conscious of it. All cultural practices are supplements in Derrida's sense, and to some degree always have been--this is a transposition of a very old idea of Freud's, that "higher" cultural activities attempt to satisfy needs, impulses cravings that aren't being satisfied on a more immediate experiential-instinctual level--ANYWAY--there are a million issues here--- the distinction between self-presentation and self-invention being one juicy issue, the distinction between some presumably a "real" self, and a self as a brand. And of course in this war of all against all for people's attention, there is the question, what do we want to get people's attention FOR beyond the statistical accomplishment of having gotten it. </div><div><br /></div><div>If one wanted to be heedlessly optimistic one would celebrate the way in which everyone becomes the screenwriter-film-maker of one's own life in this world of audio-visual technologies replicating and expanding at such insane speed. Stephen Mallarme's visionary hypothesis in the 1870's, "The entire world is exists in order to be part of a book" which pointed in the direction of results that Joyce and Proust would later achieve--now seems to be part of the currency of everyday cultural discourse. BUT there are seem to be a lot of unintended consequences (not to mention causes) for this that are not quite so constructive. </div><div><br /></div><div>And beyond that, it doesn't seem that very many of us are conscious of what it is we're doing." </div><div><br /></div><div>I think he hits on many interesting points, not the least of which is our own lack of awareness of what we are doing, even as we take advantage of the multitude of self-marketing methods now available to us. Are our attempts to achieve fame simply fulfilling the need to extend our identity? Do we think this accomplishment will increase our chances for success with the various ventures we pursue even as the lines between business and personal identity blur? What is the balance between self-invention and self-presentation? I've tweeted about the large numbers of social media aficionados who seem intent only on promoting themselves or their products and it's unclear to me in many cases why they even have a need to attract thousands of followers. Finally what is the "real" value of these activities, or have we become so abstracted from what is useful to existence that self-promotion is simply a kneejerk reaction when communication is easy? <br /><br /></div>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0tag:blogger.com,1999:blog-6431579238676798222.post-31468164489310346092009-03-09T21:59:00.001-07:002009-03-11T23:50:54.769-07:00The Pitfalls of Inorganic Growth on TwitterWith the rise in Twitter usage and the publication of a plenitude of stories on i<a href="http://online.wsj.com/article/SB123638550095558381.html">nfluential news sources</a>, there has been lots of <a href="http://tinyurl.com/c8febm">guidance</a> provided recently on how to get thousands of followers using "follower-pumping" practices. These usually recommend using pyramid-scheme type tools, following people with similar interests who will follow you back, writing press releases, among other approaches. The more followers you amass, the greater the likelihood that the new people that you follow will follow you also. The use of Twitter-related rating services like <a href="http://twitter.grader.com/">Twitter Grader</a> can also work in tandem with having a large number of followers to attract even more people, since numbers of followers is one method such tools use to calculate influence scores. So what is the downside to such approaches compared to getting followers organically? Getting lots of followers increases your influence, right? These tactics can be likened to startup companies that obtain venture capital funding early in their existence but don't have a compelling value proposition. Just like VC funding can speed the development of promising platforms, rapidly increase a company's market share due to spending on advertising and help a company grow rapidly in size, tactics to increase followers using schemes do work well enough to guarantee that one builds a large following. But what happens after that? What do you do after you get a few thousand followers? Are your tweets interesting enough or valuable enough to sustain that number? Have you interacted directly with enough of your followers that they'll remain with you even as you focus on gaining more followers? Are you producing enough content on other channels to sustain the number of followers you've amassed? If your answer to these questions is "no" then you run the same risk as a promising startup that has created initial market momentum through outside funding, but doesn't have a good enough product or management team to continue building profitable growth. Inevitably the funding runs out and since the company doesn't generate enough revenue to remain profitable with a less-than-compelling product, it goes out of business. Likewise, on Twitter your followers will eventually leave you if you cannot sustain your follower count with authentic and useful interactions and you'll be left with little credibility. Building a new audience when your reputation has been compromised is even more difficult than building that audience organically, one person at a time, through authentic and direct interaction.Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0tag:blogger.com,1999:blog-6431579238676798222.post-51386829792232072712009-03-07T11:24:00.001-08:002009-03-07T11:24:04.217-08:00Social Media BombsMost social media articles cover the marketing side of social media. How marketshare can be gained, products sold, reputations built on the savvy use of web 2.0 tools. But as with any compelling new technology, this medium can also be used for other purposes. One of these is the <strong>social media bomb</strong>. Defined as a series of coordinated acts on social media networks, the social media bomb is intended to attract attention through a viral dissemination of a specific message. Recently, Amnesty International asked it's supporters to send out a message at 1:10 p.m. on Friday, March 6 on Facebook, MySpace and Twitter. The message: "Each year, 1 in 10 women in Britain experience rape or other violence," was intended to raise public awareness of <a href="http://blog.protectthehuman.com/each-year-around-1-in-10-women-in-britain-experience-rape-or-other-violence/">this issue</a>. The results of this social media bomb are not yet known, but one can see a difference in impact between Twitter, where pages of retweets still appear and MySpace and Facebook, where nary any evidence of the message exists. Nonetheless with the profusion of social networks, and the ability to communicate on them ubiquitously, one can imagine more such awareness raising efforts in the future. <br> <br> Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com44tag:blogger.com,1999:blog-6431579238676798222.post-53598354566368779052008-12-11T00:15:00.000-08:002008-12-11T00:21:30.508-08:00New Business Models in the Same Old EnvironmentTo say that the recent downturn in the economy has gotten many to think about how businesses are run would probably be an understatement. However if there is one principle that seems operative in this environment, it is that the more things change the more they stay the same. In the past week we have seen stories highlighting Merrill Lynch's CEO, John Thain,<a href="http://news.yahoo.com/s/afp/20081209/ts_alt_afp/financeuscompanycompensationmerrillmorgan_081209155813" target="_blank ">lobbying to receive his $10M bonus</a>. The reasoning seems clear, he wanted to receive adequate compensation for orchestrating the sale of the 94 year old firm to Bank of America, widely considered to have been the only reason Merrill will continue to exist, at least in some form, for more years. Nonetheless that deal was made after Merrill had already lost about $11 bilion in 2008, though most of that loss has been attributed to Thain's predecessor in the job, Stanley O'Neal. Thain had already received a $15M signing bonus upon taking the position. Thus, argued New York Attorney General Andrew Cuomo, in a letter sent to Merrill's board of directors, "Clearly, the performance of Merrill's top executives throughout Merrill's abysmal year in no way justifies significant bonuses for its top executives, including the CEO." But the same old ways of doing business, whether they are outdated or inappropriate approaches to the marketplace still seem to be the most widely practiced. <p></p><br />According to the Corporate Library, the nearly 2000 CEOs of major corporations will still receive about a <a href="http://money.cnn.com/2008/12/09/news/economy/corporate_library_exec_comp/index.htm" target="_parent">7.5% raise overall in 2008</a>. Although this is far smaller than the double digit gains in previous years, this still seems out of step with the experience of employees of many corporations who are seeing unprecedented numbers of layoffs. Indeed the average raise for a U.S. households <a href="http://www.bls.gov/bls/wages.htm" target="_parent">routinely falls below 3%</a>. Ironically, after the CXO-led financial scandals at Enron, WorldCom and Adelphia, the Sarbanes-Oxley Act was passed in 2002 to, among other things, hold senior executives at companies accountable for the accuracy of financial statements. One of the provisions also highlighted what was thought to be one of the significant causes of these abuses--options compensation and large bonuses that were contingent upon good financial performance that, it was claimed, pressured executives to commit fraud. Though Sarbanes-Oxley has been widely credited for the elimination or reduction of stock options as a means to provide incentive compensation, the increasing gap in CEO versus line employee pay as highlighted by this continued divergence in salary increase percentages as well as continued evidence that boards of directors have not really changed compensation practices at the highest levels of companies, reinforces again that companies are managed no differently than they ever were. And add to that the result of these compensation practices in 2008--scores of major investment and retail banks collapsing, economic recession and the loss of many jobs. But there is more to this story than simply that outdated compensation practices continue and corporate malfeasance of a sort continues to have a negative impact on the economy. Outdated practices for running business, what we'll call "operating models," also continue. Peripatetic executives and location-locked line employees continue to be the rule, even as technology should be changing this model. Like outdated compensation packages, outdated approaches to running businesses will not improve our productivity and the work experience that most employees have, leading to unprecedented levels of job dissatisfaction. <p></p>Other changes to operating models and incentive compensation could be adopted as common practice. Businesses no longer have to be relegated to giving total credit for the accomplishments within companies to single individuals like CEOs. In fact one could argue that the average CEO is getting too much credit for what amounts to creating the proper environment for great products to be created, for example. How often can one directly attribute the performance of a company to the direct actions of its CEO? With our abilities to now collect and analyze data it should be more possible than ever to quantify the actual contribution every employee makes to the success of the company and to reward the highest contributors accordingly. <p></p><p style="margin-top: 1em; margin-right: 0px; margin-bottom: 1em; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; ">Likewise other aspects of business might also be improved through re-engineering operating models to accommodate a workforce that now actually has the ability to work in virtual environments without the loss of access to data or to corporate information systems, thus leading to reduced commuting times, better work-life balance, more satisfied and fulfilled and therefore more effective employees. This is a direct result of the accessibility of broadband and mobile technology. We are no longer in a world where a 1.5 Mbps data connection costs thousands and on-the-go access to email and business applications is costly or unprocurable. So why haven't more companies adopted virtual workforces and eliminated capital costs associated with providing most employees with on premise office space and data connectivity? Because the market has not yet had a competitor that outcompetes other similar businesses though the use of these new technologies. Most businesses are still doing business the old way-by emphasizing face time, rewarding employees who have more of it under the delusion that that equates to more productivity. </p>However that doesn't have to continue to be the case; but it will take rare leaders with the vision to challenge traditional approaches to business and who can win in the marketplace to change businesses everywhere. <p></p>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com1tag:blogger.com,1999:blog-6431579238676798222.post-65756180661838177762008-09-24T10:28:00.000-07:002008-11-21T09:23:52.208-08:00What Makes a Great Leader?In the midst of the investment banking meltdown and a proposed $700B bailout some thoughts on great leadership seem timely. All too often we assume, perhaps because Keynesian economics postulate that companies operate to benefit themselves, that corporate leaders are destined to react to financial incentives like Pavlovian dogs--eager to perform tricks of decision-making that will result in the highest possible compensation--for themselves. I don't believe this has to be the case, though often, expectations lead to a self-fulfilling prophecy. Rather, great leaders are able to overcome these impulses and simply <span class="Apple-style-span" style="font-style: italic;">lead, </span>rather than be at best, average <span class="Apple-style-span" style="font-style: italic;">managers</span>. So how does one become a great leader? The following list of behaviors and attitudes represents my personal observations of those I considered great leaders from over a decade of observation in Fortune 500 companies. Your thoughts on this list are welcome. <div><br /><div><div>1) <span class="Apple-style-span" style="font-weight: bold;">Frankness</span> -- Great leaders value <span class="Apple-style-span" style="">frankness</span> within their teams and practice it themselves. This is not to be confused with being inclined to be critical. Rather, this is a willingness to tackle difficult things, whether business results or personnel problems, openly. Businesses cannot improve without a clear recognition of what is the problem that prevents excellent performance, and what is the clear path to the solution. Those inclined to only be critical, perhaps at others' expense, make major problems out of minor ones; and new leaders who are prey to being critical are quick to highlight the mistakes of past leaders or the teams they managed, often with detrimental results. Being willing to acknowledge that there is a problem and to approach the solution in the most direct manner possible constitutes frankness. </div><div><br /></div><div>2) <span class="Apple-style-span" style="font-weight: bold;">Understand and address the re</span><span class="Apple-style-span" style="font-weight: bold;">al issues </span>-- All too often real results within a company are obfuscated by a bewildering array of data. Executives love to obtain data, to the point where this activity might supercede actually running the business in importance. Frequently, the vast amounts of data that are generated are used to demonstrate that <span class="Apple-style-span" style="font-style: italic;">there is no problem, </span>even if business results are poor. There should be a clear delineation between what is actually important to know or to do to run the business and those low-value-added activities that are designed to explain. Don't let the former overwhelm the latter. </div><div><br /></div><div>3) <span class="Apple-style-span" style="font-weight: bold;">Transparency -- </span>Great leaders do not fear scrutiny, either of their decisions or of their process for reaching decisions. They don't have ulterior motives that cause them to "game" their employees or peers to obtain hidden goals. </div><div><br /></div><div>4) <span class="Apple-style-span" style="font-weight: bold;">Selflessness </span>-- Leaders can't be great if they only serve themselves. Great leaders focus on the success of the business because it leads to the greatest level of success for all. They are not troubled if their decisions cause the demise of their own careers, if that is the right thing for the business. They focus on their teams, peers and superiors before they focus on themselves. Great leaders also don't simply work to maximize the results within their area of responsibility, rather they focus on having the broadest possible impact with their activities. They abhor succeeding at the expense of others working for the same company. </div><div><br /></div><div>5) <span class="Apple-style-span" style="font-weight: bold;">Thought leadership</span> -- Great leaders have great ideas and are willing and able to create a vision that compels others to follow. Leaders constantly seed the organization with great ideas and are untroubled about whether they receive credit for it or not. </div><div><br /></div><div>6) <span class="Apple-style-span" style="font-weight: bold;">Empathy</span> -- great leaders can sense how their teams feel and make decisions differently because, not in spite, of it. </div><div><br /></div><div>7) <span class="Apple-style-span" style="font-weight: bold;">Intuition</span> -- great leaders have enough experience to avoid common mistakes, but they also have intuition based upon experience that results in the correct decision being made more often than not. There is nothing worse than a leader with poor intuition. All of the data analysis in the world can't salvage an unerring aim for the worst of all possible decisions when an array of choices exists. </div><div><br /></div><div>8) <span class="Apple-style-span" style="font-weight: bold;">Common sens</span><span class="Apple-style-span" style="font-weight: bold;">e </span>-- Too often common sense is the least trusted approach for making a decision in business. Managers who love data are quick to adopt nonsensical approaches that defy common sense. In the corporate world, teams sometimes speak metaphorically of those who seemed to wear "two hats." That is, the same people who exhibit great common sense when making decisions for themselves become irresponsible or exhibit poor judgement when making decisions for the company. </div><div><br /></div><div>9) <span class="Apple-style-span" style="font-weight: bold;">Don't wait for permission</span> -- Great leaders <span class="Apple-style-span" style="">don't wait to be told</span> to address any issues that might exist. They constantly identify and solve problems, whether others ask or not.</div><div><br /></div><div>10) <span class="Apple-style-span" style="font-weight: bold;">Recognition of Accomplishments</span> -- Great leaders are<span class="Apple-style-span" style="font-weight: bold;"> q</span><span class="Apple-style-span" style="">uick to recognize</span> the efforts of the many that contributed to success when it is achieved. </div><div><br /></div><div>11) <span class="Apple-style-span" style="font-weight: bold;">Ethics</span> -- Great leaders have <span class="Apple-style-span" style="">strong ethics</span> and will avoid even the <span class="Apple-style-span" style="font-style: italic;">appearance</span> of impropriety. </div></div></div><script type="text/javascript"><br />var pageTracker = _gat._getTracker("UA-4598613-1");<br />pageTracker._trackPageview();<br /></script>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com3tag:blogger.com,1999:blog-6431579238676798222.post-61595316243881841722008-08-19T10:10:00.001-07:002008-10-17T00:08:48.267-07:00To Invest Capital or Not to Invest?Businesses contemplating the deployment of new technology have always struggled with a fundamental question: will they be better positioned by extracting the greatest use out of existing technology or will capital investments in new technology actually yield better results? The answer to this question is not easily determined, primarily because all benefits of new technology deployment cannot be quantified. Take for example, <a href="http://www.nytimes.com/2008/08/19/technology/19fios.html?pagewanted=2&_r=1&adxnnl=1&partner=rssyahoo&emc=rss&adxnnlx=1219165314-rCIGo6XSwPFiIjaGMrqaww">Verizon's investments in FiOS</a>. From investors to other telecommunications carriers, there has been mixed opinion on the value of deploying fiber optics to the home. Initial skepticism of FiOS is apparently waning for some with Verizon trumpeting unexpected advantages from their initiative. Others who are more financially oriented and who favor <a href="http://en.wikipedia.org/wiki/Economic_value_added">Economic Value Added</a>-based approaches to investment however, might favor the more conservative direction of "no new capital before it's time" and that time seems to be well after the asset is deemed obsolete. The most appropriate direction is perhaps one that focuses on the nature of the investment. Is the investment a strategic one or not? If one considers a carrier's network investment strategic, in other words, a differentiator from competitors in every sense of the word, and Verizon certainly seems to have taken that view with both wireless and wireline networks, then the investment is warranted since it delivers against customer desires and internal objectives. If, on the other hand, a carrier's network is simply another undifferentiated part of their business, perhaps the wisest approach is to defer the investment or redirect it toward those things that are strategic. There is no clear "correct" answer to this question and more will be written on it in the future. Comments are welcome. <script type="text/javascript"><br />var pageTracker = _gat._getTracker("UA-4598613-1");<br />pageTracker._trackPageview();<br /></script>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0tag:blogger.com,1999:blog-6431579238676798222.post-72301946040984840522008-07-16T20:12:00.000-07:002008-10-17T00:09:01.309-07:00Business Natural SelectionWhen scientists talk about Natural Selection, they refer to the process through which certain heritable (passed on via DNA) characteristics are favored by the environment at a given time, leading to the proliferation of organisms that carry these characteristics. The organisms are said to be "selected" by the given environmental conditions. Likewise one can think of similar principles in effect governing the success of a given business under specific economic or business conditions. <a href="http://www.scientificblogging.com/news_releases/natural_selection_applies_in_business_also_say_researchers">Algorithms</a> have been proposed to explain the success or failure of a business based upon certain financial performance metrics. But one can also think about this at a more general level. The existence of Business Natural Selection (BNS) can explain quite a few things. For example, when the latest genius CEO is profiled in the media, one is often struck by the uncanny insightfulness of decision-making that led this individual to success when many others failed. Time and time again, when poor decisions were made by many, the "genius" makes the right call. In fact that is because we are scrutinizing the chain of decisions after the fact. How many business leaders are convinced when they are faced with choices, that their ultimate choice was the wrong one? Does it make more sense to assume that the majority of business leaders make what they consider to be the best choice for a given situation? Sometimes that choice is arrived at more confidently than other times, but no one knowingly opts to move in the <span class="Apple-style-span" style="font-style: italic;">wrong</span> direction, or to make the <span class="Apple-style-span" style="font-style: italic;">wrong</span> decision. Rather, the best decision is generally thought to be selected and time proves whether that decision was a good one or a bad one. If one creates a chain of decisions over a given span of time that might have been made by a given business, with thousands if not millions of decisions made, certain ones are favored under a given set of business or economic conditions. Over time, with millions of businesses counted, a few might have made a series of decisions that ultimately favors them over other businesses for that timespan. These are the companies that "win" in the marketplace and who thrive despite downturns or other failures within their industry. This then, may be an explanation for the common observation that the CEO that is profiled today in a prominent periodical is also the one fired next year. In an environment where Business Natural Selection governs failures and successes, that executive, if not possessing of statistics-beating insight, will quickly regress to the mean and perform no better or worse than others. In the case of companies that are struggling however, average performance might not sustain a career. Likewise those leaders with true insight and who have not benefitted from BNS, will exhibit a record of statistics-beating performance year after year. <script type="text/javascript"><br />var pageTracker = _gat._getTracker("UA-4598613-1");<br />pageTracker._trackPageview();<br /></script>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com2tag:blogger.com,1999:blog-6431579238676798222.post-75184605766890013482008-07-16T13:12:00.001-07:002008-10-17T00:09:15.746-07:00The Problem of Corporate Transformation"Business Transformation" is increasingly in vogue as businesses look for ways to deter the inevitable decline that occurs when their core products become commodities or worse. Telecommunications, financial institutions, computer and network hardware manufacturers have all struggled recently. Companies (Lucent, Nortel, etc) in these industries in particular have goals to dramatically re-engineer themselves to reinvigorate growth. This then becomes an archetypal transformation: cut costs, eliminate non-performing product lines, enter new or adjacent markets, offer new products and change the corporate culture. <div><br /></div><div>One oft-cited example of successful transformation was IBM's change from being the world's largest mainframe computer manufacturer to the largest technology services provider in the world. But most often dramatic re-engineering does not lead to success. <a href="https://www.csb.executiveboard.com/Public/Default.aspx">Corporate Strategy Board</a> research, the most comprehensive to date on the topic, cites a 1 in 36 chance that businesses are able to create a model for sustained revenue growth. Of these only about 5% are effected through business transformation. None were the result of entering wholly unrelated lines of business. The pitfalls are many, lack of core competency with proposed new business lines, loss of strategic direction and the challenges of developing new technology infrastructure or to support an unfamiliar business. </div><div><div><br /></div><div>In addition, there is a natural tendency for people throughout an organization to reject a new culture. Corporate change experts talk about the "ten percenters." The ten percent of the employee base who will never embrace the change. </div><div><br /></div><div>With these issues in mind, here are some suggestions based upon experience on how to successfully transform a business, given these challenges:<br /></div><div><br /></div><div>1) Ensure that a suitable culture change plan is in place prior to undertaking the change. Hire seasoned experts. There will be no time to "learn while doing" with this type of venture and one cannot afford to fail because employees weren't receptive.</div><div><br /></div><div>2) Obtain funding for the undertaking before starting. When beginning extensive technology re-engineering efforts, not having sufficient funding to complete the re-engineering leads to costly redesigns. It is best to obtain prioritized funding that remains in the funding portfolio for the requisite number of years to complete the project successfully.</div><div><br /></div><div>3) Create a dedicated transformation organization to lead the effort and an appropriate governance process to manage it across the enterprise. Include both business and technical architects that will lead platform re-engineering and business model re-engineering efforts. </div><div><br /></div><div>4) Define concrete measures of success for the transformation that cross the business. Be aware of interdepartment metrics tradeoffs--e.g. when cost is reduced in one area of the business only to increase in another unnoticed as a result of a process or system change. Attach the appropriate incentives to these measures to drive their attainment. </div><div><br /></div><div>5) Identify empowered executive advocates or sponsors. It is often best if the sponsor is the chief executive officer or another similarly senior position.</div><div><br /></div><div>6) Don't underestimate development timelines and costs for the project at the onset and ensure it generates an appropriate return even under these conditions. In fact a rule of thumb would be to double or even triple informed cost estimates. Also, don't underestimate benefits that accrue as a result of the change, however. </div><div><br /></div><div>7) Engage and involve the highest performers in line functions to assist with the process of transforming the business. It will take that caliber of talent to realize success. </div><div><br /></div><div>8) Don't try to do too much all at once. Engineering such complex changes is best tackled via understanding interdependencies and properly sequencing activities. </div></div>Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0tag:blogger.com,1999:blog-6431579238676798222.post-67448704731133095382008-07-11T11:39:00.000-07:002008-10-17T00:09:27.208-07:00Net Neutrality Imminent?The Wall Street Journal reported today that FCC chairman Kevin Martin intends to force Comcast to change its practices related to <a href="http://bits.blogs.nytimes.com/2008/07/11/an-imminent-victory-for-net-neutrality-advocates/index.html?partner=rssyahoo&emc=rss">slowing down certain types of data traffic</a>. This is certain to be viewed by Net Neutrality advocates as a victory. However as indicated by the article, it may hasten the adoption of new approaches toward pricing of broadband data services by service providers. Most carriers today will argue that capital costs to build high speed broadband networks cannot be recovered under today's "all you can eat" pricing models and increasing use of high-bandwidth services like streaming video and that application providers like Google are benefitting from these low prices without incurring any of the costs for construction of broadband networks. Ultimately whether Net Neutrality advocates' or broadband service providers' arguments prevail at the FCC, consumers will no doubt be the ones paying for the information superhighway. Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0tag:blogger.com,1999:blog-6431579238676798222.post-52344406071442170752008-07-06T20:46:00.000-07:002008-10-17T00:09:36.811-07:00The Role of Emotions in TradingWhy does the average individual investor have a reputation for buying high and selling low? If you use a financial advisor, you might have been given the talk on the need to "control your emotions" when trading. The <a href="http://www.sfomag.com/article.aspx?ID=1193">July issue of SFO Magazine</a> outlines the role of emotions in trading and how to overcome their pitfalls.Silverzippohttp://www.blogger.com/profile/07648080492029618104noreply@blogger.com0