by Adam Hartung | Jul 12, 2010 | Current Affairs, Defend & Extend, In the Swamp, In the Whirlpool, Leadership, Lock-in
What do Tony Hayward, Jeff Skilling and Bernard Ebbers possibly have in common? They all might end up convicted felons.
While this may sound ridiculous, and very, very scary to corporate CEOs, nobody expected Skilling, the CEO of Enron, or Ebbers, the CEO of Worldcom, to go to jail. They were hailed as heros, and admired for their leadership of large, high growth companies. Yet, Ebbers is waiting out a 25 year sentence, convicted of acting illegally in the value destruction at Worldcom (CNNMoney.com “Ebbers Gets 25 Years.”) And Skilling is working on a 24 year sentence for the downfall of Enron (CNNMoney.com “Skilling Gets 24 Years.”)
Now, BusinessWeek.com is asking if the same fate awaits Tony Hayward in “The Oil Spill: Will BP Face Criminal Charges?“ As the spill goes on and on, and the damages increase, the public sentiment against BP is increasing. If the spill goes around Florida to the east coast there will be millions more citizens, and businesses, affected. It is clear that many laws were broken, as the article lays out. So it’s not a mute question that an aggressive prosecutor would go after imprisoning Hayward.
As reprehensible as many may find each of these 3 men, how did they end up facing criminal prosecution? Even The Washington Post has asked “Did Jeff Skilling Do Anything Illegal?“ A Harvard MBA and former McKinsey partner, Mr. Skilling calmly described the practices at Enron completely unapologitically. He was certain he’d done nothing wrong. Mr. Ebbers was a devout Christian and Sunday School teacher who claimed all through the trial and to reporters on the way to jail he’d done nothing wrong. I’m sure Mr. Hayward believes similarly.
What all 3 did was simply push the Success Formula too far. Worldcom, Enron and BP were wildly successful companies. They created Success Formulas that earned billions of dollars. For years they grew. But unfortunately, they kept trying to push the Success Formula to better results when market shifts left that formula earning lower returns. Rather than recognize that lower returns were an indication of a Success Formula needing change, they dug in their heals and “got creative” in Defending & Extending it. They used “best practices” to lower costs, and to seek out financial machinations which would allow the business to look more profitable – even as they undertook more, and more risk.
To them, taking risk rather than change the Success Formula wasn’t thought of as risk. They were out to protect something they felt had to be protected, at all cost. The Success Formula that had made money for years, enriching not only themselves but investors, employees and suppliers. They were blind to the added risk, because it was assumed that doing incrementally more was the “right thing to do” for the company. They were doing what they believed were “best practices” for the “health” of their companies.
Defending a Success Formula can become very risky, as I wrote in Forbes “BP’s Only Hope For Its Future.” Years of doing the same thing, only more, better, faster, cheaper, makes it harder and harder to do something different. The culture and decision-making systems are designed, and modified — Locked-in — to push employees to make the same decision over and over, regardless of risk. In BPs case we now know that cheaper parts and practices were employed to improve profitability – something each employee felt was in the company’s best interest. Only, in the end, it served to layer risk upon risk – and lead to an eventual disaster.
Are you “doubling down” on risk in your business? Are you investing more and more into trying to improve returns in a business that is earning less and less – and growing less and less? If so, you could be setting yourself up for disaster as well. Let’s hope in doing so you don’t run afoul of the law. 25 years in prison is a hefty price to pay for spending too much energy “focused on your core” business at a time when you should be looking for new ways to expand and grow where the risks are less.
by Adam Hartung | Jul 9, 2010 | Current Affairs, In the Rapids, Innovation, Leadership, Lock-in, Openness, Web/Tech
“To Boost Innovation Just Keep the Boss Away” titles the BQF Innovation website. Citing data from The Nielsen Company’s study of 30 large consumer products companies showed that companies with White Space Teams (what they call Blue Sky) teams are far more successful at creating revenue generating innovation than companies trying to innovate through the traditional organization structure. And, as recommended in this blog, these teams are more than twice as effective when they are dedicated off-site teams! And, organizations with minimal senior executive involvement generate 80% more product revenue than those with heavy senior level participation.
Hierarchy is an innovation killer. The higher a manager goes, the more he feels compelled to “weed out” options. Unfortunately, most of this weeding is based upon Defending & Extending the existing Success Formula. Doing more of the same better, faster and cheaper dominates innovation thinking the higher the manager is placed! Rather than championing new innovations that could take the business into new markets with new products, senior people will apply the 20 Innovation Killers from my last blog posting! They will say the idea doesn’t fit, for a variety of reasons, and feel justified they’ve added their managerial “value.”
The Heart of Innovation column from IdeaChampions.com amplifies this in “Breakthrough as an Accident Waiting to Happen.” The author describes how many innovations are the result of ongoing experimentation. Trying new combinations. Learning, and trying again. Managers too often want the innovation to be fully developed “in the lab.” They are unwilling to set up teams that are given the permission, and resources, to try, get market feedback, and keep trying. To learn how to compete in order to eventually win!
All companies want to grow. All claim to want innovation. But too often, the senior people just want small improvements that don’t affect any Lock-ins. They hope for spectacular results from minimal input. Contrarily, the organization itself frequently contains a large number of people who have great insights for things that could work – if given the opportunity to be applied, tested, reworked and made to fit emerging needs. We need are more managers willing to set up White Space teams and let them do their job – while holding the teams accountable for results! Like the leadership at Apple and Google, let people work and learn, and evaluate them on the outcomes – rather than trying to tell them what they need to do, how they need to do it, and setting up boundaries to keep innovation within the Locked-in Succeess Formula!
by Adam Hartung | Jul 6, 2010 | Defend & Extend, In the Swamp, Innovation, Leadership, Lock-in
All organizations must move into new markets with new customers buying new solutions. It’s inevitable. Over time, all product markets shift to new solutions. Given this inevitability, isn’t it amazing how few make the shift?
BloggingInnovation.com published a GREAT article “20 Phrases That Kill Ideas and Innovation.” What I like is that we’ve all heard these 20!!!! Here we go with “That’s a good idea, but…”
- It’s against company policy
- It’s not practical
- It’s not necessary
- We don’t have the resources
- It will cost too much
- We’ve never done it that way
- Our customers (or vendors) won’t like it
- It needs more study
- It’s not part of your job
- Let’s make a survey first
- Let’s sit on it for a while
- That’s not our problem
- The boss won’t go for it
- The old timers won’t use it
- It’s too hard to administer
- Why hasn’t someone else suggested it before?
- Let’s form a committee
- We should wait until the economy improves
- Who else has tried it?
- Is it best practice?
Really! I bet you’ve heard all of these. Defend & Extend Management becomes so embedded in the culture managers don’t even realize they’ve turned off to new markets and fallen into focusing solely on trying to protect the old. And as markets shift these phrases never go away – they just maintain Lock-in!
The next time somebody brings you an idea – an innovation – I want you to gauge your reaction. Before you speak, see if your mind brings you one of these 20. If so, you’re more dedicated to Lock-in than growth. You’re stuck in D&E Management. And that means you need a healthy dose of The Phoenix Principle. Time to do some scenario planning, dig deeply into competitors, Disrupt those Lock-ins and set up a White Space team to explore new opportunities! Overcome these objections before they stop you – cold!
by Adam Hartung | Jul 2, 2010 | Current Affairs, Defend & Extend, In the Swamp, Innovation, Leadership, Web/Tech
(Note: See more about my globally syndicated radio X Zone Radio interview with Rod McConnell in postscript below)
Today the Harvard Business Review blog got to the topic of my early May Forbes article (Microsoft's Dismal Future) with "Microsoft and the Innovator's Paradox." Unfortunately, painting Microsoft as facing a difficult paradox gives Ballmer and the management team too much credit. It implies that Defend & Extend behavior is a good tradeoff compared to investing in growth markets. This isn't really a trade-off because good companies pursue both courses, growing the existing business as long as possible AND investing in new growth markets simultaneously. Like Google investing in search and ad placement while investing in Android. Positioning Microsoft as facing a dilemma may sound politically attractive, but is inaccurate. Microsoft simply needed to do more in growth markets – a problem shared by too many companies. Instead it spent way too much in sustaining developments – and now is in big trouble.
HBR did not offer much of a solution for Microsoft. Instead, leaving the impression that it's reasonable to expect "mature" organizations to do more sustaining innovation. The truncated S curve displayed HBR article ignores the reality that "mature" companies don't extend forever – but rather simply fall into the Swamp of poor returns and eventually disappear into the Whirlpool as growth slows. And further ignores the horrific cost of sustaining innovation, as we detailed in Microsoft's exorbitant 2009 R&D spending as the company kept pushing Windows 7 and Office 2010 development. Microsoft really hasn't faced a "paradox" for investing for many years – leadership made a bad decision to keep investing in old markets rather than pursue new ones.
Contrarily, Mediapost.com's Marketing Health column ran a description of how pharmaceutical companies could use iPads to improve the performance of their physician customers and simultaneously market their own products in "Tap Into iPad's Marketing Power." Using these low cost devices (including Kindle and Cisco's new Cius [Cnet.com "Cisco Introduces New Cius Android Tablet PC"]) is not a "paradox" in investing for growth. It's additive. As readers of this blog know, for over a year I've promoted marketers and designers become more proactive in using these new mobile devices. Only by viewing the new development as a trade-off from doing more of the old marketing does it slow investment in a high growth opportunity. By looking at the new opportunity as something that takes away from doing more of the old creates an artificial paradox – not a real one. Companies simply aren't doing enough of what will help them grow – too often choosing the low-return route of doing more of what they know in old markets simply because they understand it better.
PS – Check out my radio interview with Rod McConnel of X Zone Radio about BPs management crisis, and how it
applies to all businesses. Recorded by X-Zone in Canada the show is being syndicated
this weekend across the world to various radio stations. You can find the timing of play, or the podcast version, at the
X-Zone web site. Download On Apple iTunes here. Download as Podcast here. Or listen on X Zone jukebox here.
PPS – Thanks to Gary Woodill at Brandon-Hall.com for picking up my comments on his Workplace Learning page – "It's the One You Don't See That'll Kill You." He trumpets replacing traditional strategic planning with more scenario planning to better prepare companies for success. Great article!
To Everyone in America – Happy Independence Day!
by Adam Hartung | Jul 1, 2010 | Current Affairs, Defend & Extend, In the Swamp, Leadership, Lock-in, Web/Tech
"Stay the Course" is a popular phrase. It sounds all macho, and committed to a destiny, to proclaim you must "stay the course." However, as bnet.com pointed out there are times when "Stay the Course is a Recipe for Disaster." The article calls it "Stay The Course-Itis" (or STCI) for leaders that don't know when it's time to change direction. We can now see that BP simply drilled one too many deep-water holes in the Gulf – just as Exxon let one too many tipsy captains steer oil vessels before the Valdez crashed. Staying the course may sound good, but too often the course isn't right. And a bad course can lead you into disaster.
Take for example Dell. As reported by The New York Times, and picked up by CNBC.com, "in Suit Over Computers, Window into Dell's Fall," we learn that Dell went just a bit too far in its effort to be a low cost industry supplier. Hoping desperately to maintain a slight lead in lowering costs, Defending & Extending Dell's long-term Success Formula as industry supply chain leader, Dell simply bought bad parts. It then replaced bad product with more bad product. Refused to admit to itself that it had gone "too cheap" in its effort to be cheap. Things went from bad to worse as the Lock-in to keep costs low led to multiple customer disasters – even at the law firm defending Dell in court! And Michael Dell is being accused of financial irregularities in his effort to make Dell's results possibly look better than they were. Both corporately and personally leadership made some big mistakes – not unlike BP – in the effort for Dell to "Stay the Course."
Microsoft certainly isn't without it's STCI as CEO Steve Ballmer keeps dropping new projects to funnel money and other resources into old desktop/laptop products. The Wall Street Journal reported "Microsoft Kills Kin Mobile Less Than Two Months After Launch." Kin was a product targeted at the hot market for youthful cell phone users. A double-digit growth market. But Microsoft is backing out, despite its ballyhooed launch – including announcements to take the product to China very soon. Microsoft can't seem to do much but "Stay the Course" supporting old products.
Both tech companies have had no improvement in their market value the last decade. And BP has watched its value drop more than 50% since the spill started. Some now actively wonder if BP could disappear as SeekingAlpha.com discussed in "How Likely is a BP Takeover bid?" Staying the course in the Gulf, drilling for more oil in deeper water and taking on more risk, could cost BP its existence if another company buys up the discounted equity. Of course, there is still reason to think BP could get wiped out from the costs of the disaster without a takeover.
Companies can get over SCTI if they follow advice given at ABCNews.com "Reboot Your Small Business by Reinventing." The article applies to all size businesses, however. When you see your business doing poorly, especially relative to competitors, it's time to attack sacred cows and do some things differently. Instead of "doubling down" on the old Success Formula, do new things!
You don't want to end up like BP, Dell or Microsoft today. Once great companies that are floundering now – struggling to find growth as they continue spending so much energy trying to "Stay the Course." When the seas are too calm to sail, leaving you stranded with no growth, or the waves are crashing too heavily, as competition is derailing your efforts, why not set a new course? One that can lead you to better growth? There's no harm, or shame, in heading where the market is going, using Disruptions and White Space to develop new solutions. Don't let your ego, pride, or history/legacy push you to "stay the course" when better results can be found in new markets, new customers and new solutions.
PS – Yesterday SmartBrief on Leadership newsletter ran ""For Real Innovation, Pick Up the Phone" linking to the BloggingInnovation.com repost of "It's the One You Don't See That Kills You." Compliments to Braden Kelley for a great web site, and getting the word out about how important it is to apply innovation! I enjoyed how the newsletter grabbed the conclusion, that businesses need to obtain more outsider input, and ran with it as the title. better than my title, to be honest!
PPS – PRLog.org just picked up my blog on "Journalism in 2020." Great to see the media enjoying my comments about their industry, and passing them along through this communication site!
by Adam Hartung | Jun 29, 2010 | Current Affairs, Defend & Extend, In the Swamp, Leadership, Lock-in, Science
I weighed in late on the Gulf Coast disaster – and my impressions of British Petroleum. I wanted to be thoughtful, as the ramifications of this will be with us for decades. Compared to the hurricane that wrecked New Orleans this situation is far worse. Many more businesses are being shut down, the ecological disaster is far worse, and the clean-up will take much longer – even though New Orleans is far from a full recovery from hurricane Katrina. And there was lots (lots) of finger-pointing going around. It is going to take a lot of money and energy to deal with this mess – and lots of blame-laying (lawsuits) are inevitable
But I'm always the guy looking forward, and that's why my Forbes article, "BP's Only Hope for Its Future," focused on what BP needs to do now to recapture the more than $100B of lost value its investors have suffered – not to mention out-of-pocket cash costs still rolling up.
There is a raging debate about what investors can expect, as typified by the SeekingAlpha.com article "Where is BP Headed: $70 or $0?" Unfortunately, most of these articles focus on 2 factors: (a) what are the estimates of cash out to fix the mess and legal battles compared to historical cash inflows from revenues, and (b) contrarians typically think no situation is ever as bad as it initially looks so surely BP is worth more than it's currently depressed value.
Addressing the latter first, I'd recommend investors look at GM, Chrysler, Lehman Brothers and Circuit City. Things definitely can get worse. Problems created across years of sticking to an outdated Success Formula, remaining Locked-in to following historical best practices, wiped out their investors. Things can definitely get worse for BP. It will not be acceptable for the company to remain focused on "business as usual" hoping to "weather the storm" and allow "things to get back to normal." That scenario is a death sentence. We haven't yet seen what new regulations, taxes and restrictions – nor the eventual cost of 20 years of dead seas charged to BP and its industry brethren – will cost. BP has to make changes if it wants to regain growth – and most likely if it wants to survive.
And this leads to item (a). Nobody knows the long-term costs chargeable to BP. Nor do we know what the future cash inflows will look like. We don't know the brand impact. Nor do we know how changes in regulations or industry practices will hurt cash flowing in the door. It's the inability of the past to predict the future that makes efforts at cash flow planning mute. Lots of number crunching isn't the answer – it's understanding that the assumptions could well be seriously changing. There are more unknown variables than known right now. Which makes it all the more important BP realize it must change it's Success Formula to make sure it not only avoids another disaster, but finds a way to profitably grow in the aftermath of this event and its changes on the industry.
Many are calling for firing the CEO, as 24×7 Wall Street does in "BP Can Deny CEO Departure Story; But Fate Already Set." I call this the hero and goat syndrome. Americans like to think that the CEO should be lionized as a hero when results are good, and blamed as a goat when results are bad. Unfortunately companies rely on lots more than CEOs (despite their pay) for results. The problems at BP are with the Success Formula – now some 100 years old – and the inability of the total management team to attack old Lock-ins in order to develop something new. As my last blog pointed out, even HBR doubted there was any reality in the "Beyond Petroleum" headline.
BP must attack its historical ways of doing business. This isn't just a short-term crisis. The Gulf disaster is the result of pushing an old Success Formula too far. Of going into deeper and deeper water, at greater and greater risk, for less and less yield in order to keep finding oil. Unfortunately BP seems to be viewing this not as an example of what happens when marginal economics keeps you doing the same thing, over and over, even as returns decline. Too bad, because this is the kind of event that highlights a serious change is needed in BP's future direction.
I was impressed with a Harvard Business School Working Knowledge survey result in "How Do You Weigh Strategy, Execution and Culture in An Organization's Success?" Respondents overwhelming voted that success requires managing "culture." And that is largely what BP now needs to do. The Beyond Petroleum strategy was clearly enunciated, but execution remained focused on the old direction because the culture did not change. And that's what attacking Lock-ins and implementing White Space is designed to do – move an organization's culture forward by addressing behaviors, decision-making structures and old cost models.
When I was a boy I'd see a tree show foliage problems and my father would say "we might as well cut it down, that tree is dead." I'd be shocked, the tree looked fine. But my father, a farmer, knew that the roots had been damaged. We were just seeing the slow process of death, that might take a year or two. Fortunately, BP isn't a tree. And although its Success Formula roots are in trouble, unlike a tree they can be changed. Let's hope the Board takes action to make changes quickly so BP's future doesn't remain completely imperiled.
For more on using Disruptions to address problems listen to my radio Interview "Disrupt to Win." Or listen to a short podcast on how to "Drive Innovation by Disrupting the Status Quo." Or read my CIOMagazine column on how to "Use Disruptions to Move Beyond Legacy" in thinking and planning.
by Adam Hartung | Jun 25, 2010 | Current Affairs, Defend & Extend, In the Swamp, Leadership, Lock-in
Leadership
BP's Only Hope For Its Future
It must throw out its formula for success.
"Beyond Petroleum?" BP looks anything but that now. How could a
company that spent so much money trying to make us think it was
something else remain so tied to, and now so damaged by, that product?
Was it just trying to fool us with those ads? Or is there something more
fundamentally wrong here? Perhaps something wrong in the management
system used not only by BP but by almost all companies today?
That's the first paragraph in my latest column on Forbes.com (Read BP's Only Hope For Its Future here). British Petroleum's situation was avoidable – if the company hadn't simply remained so dedicated to "Defend & Extend Management" – the practice of doing more of the same because it's what the company does best. Unfortunately too many companies follow this "best practice," sticking to their "core," and don't use White Space to find new opportunities for growth. All the way into disaster!
The Harvard Business Review web site describes the mismatch between BP's claim of heading in a new direction versus company reality in "The BP Brand's Avoidable Fall." British Petroleum's campaign is now a decade old, trying to convince everyone they weren't just an oil company. Looking back HBR recalls that authors then claimed about BP's campaign "this [strategy] seems to be at variance with organizational reality
and the [firm's] actual identity….[BP's] stated corporate aim of
being green-oriented…is an aspiration which to us bears arguably
questionable resemblance to near-term reality. At the time,
environmentalists estimated that only one percent of BP's activities
came from sustainable sources…Now, the stark contrast between BP's image and reality has substantially
weakened its reputation."
BP simply couldn't quit drilling for oil – because it was so dedicated to Defending & Extending the BP legacy. So it kept moving into more difficult fields, at higher cost, with lower yields. Now all those billions of dollars in advertising are lost, along with all the money for the clean up. Costs it will take shareholders years to recover. Even while leadership knew it had to move in a different direction – and advertised the need!
The spill costs of course move well beyond BP. For example, the network of small businesspeople that run BP refilling stations have been hurt as Crain's Chicago Business reported, "Chicago Gas Station Owners Hit By BP Spillover." Miles, and billions of dollars, removed from BP headquarters decisions, thousands of independent small businesspeople are losing revenue, due to the brand destruction created by BP taking greater and greater risks to Defend & Extend their oil business. Customers have a choice, and when a reputation is sullied many often change suppliers. Remember how Toyota car sales tanked as reports of their safety mishandling became available?
Despite the problems of Defending & Extending a business, leaders don't give up easily. The Daily Caller reports "Experts Say Obama's Drilling Plan Could Cause Another Disaster." Amidst this huge clean-up effort, there are many who want to maintain drilling activity – because short-term they want the jobs and economic benefits such drilling creates. Just the sort of marginal, Locked-in decision-making that is now hurting BP. The region is already losing fisherman, tourists and other businesses from this disaster. When will the Gulf Coast identify other ways to grow besides the economically and ecologically risky deep-water drilling activity?
BP, and the states affected by this disaster, desperately need to move "Beyond Petroleum." But doing so will require extensive use of White Space for finding and cultivating new businesses. It can be done. Yet so far, despite the horror of this disaster, there is more effort being expended to find ways to continue on the same route than disrupt old behaviors and find new sources of revenue. Not even a disaster of this magnitude disrupts those really dedicated to Defend & Extend their locked-in success formula.
As the article says, once you succumb to a Locked-in Defend & Extend strategy – like British Petroleum – management just can't help itself but to do "more of the same." Dedicated to Defend & Extend Management, no company could move "Beyond Petroleum." Are all (or most of) your resources dedicated to Defending & Extending your legacy business? Do you have White Space in your organization to move beyond your legacy? Or will it take a disaster to demonstrate how risky your strategy has become?
by Adam Hartung | Jun 24, 2010 | Current Affairs, Defend & Extend, In the Swamp, Leadership
How widely do you plan for a different future? Do you think British Petroleaum's (BP's) engineers and managers knew there was a chance of a major problem coming from deep water drilling? It seems illogical to think they didn't know the chance existed. Yet, they seemed pretty ill-prepared for the problem. As did the federal government agencies and responders – as well as all the businesses that make a living out of cleaning up water-based oil spills. Critical-Thinking.com sums up the issue pretty succinctly in the article "What is Your Company's Deepwater Horizon?" According to the article, the problem at BP is one that lots of companies have; most businesses simply don't put enough effort into planning for worst case scenarios.
Actually, the problem is worse than that. Most companies only plan for one scenario – more of the same. Planning processes rarely do more than extend past performance. In today's fast paced, global, highly competitive world it would seem that is about the least likeliest scenario. But it's the one that dominates how businesses plan. That so many businesses have been turning for the worse, or failing, is testament to how smart people are let down by planning processes that simply don't consider alternatives strongly enough. Look at the old AT&T, Tribune Corp., GM, Sears, Lehman Brothers, Silicon Graphics, Sun Microsystems, NCR, RCA, Unisys, Zenith, International Harvester, Brach's Candy…..
But planning problems are even worse than this! The first order problem is simply thinking about the potential scenarios and planning for them. Like the military does before a campaign. Even though nobody knows what will happen, by planning for a range of contingencies any business can be far better prepared. But what about the contingencies – the outcomes – you don't think about? What about scenarios you don't want to think about?
According to the New York Times there's "The Anosognosic's Dilemma: Something's Wrong but You Don't Know What It Is." Have you ever been in a meeting and someone, usually from the outside – like a vendor – said "but what about this _______" and they describe something going really, really, wrong — completely not as anticipated? And then somebody, usually somebody that's been around the company a long time and has both stature and influence says "well, if that happens then we're all dead. All bets are off." And with that, the conversation ends. It was a scenario, regardless of probability, that he simply didn't want to consider. His position was basically "hey youngster, that's crazy talk so let's not honor it with discussion."
Now we have a whole different scenario planning problem. One where we know, and will admit there are things that could happen, but we don't know what they are. Where we are so locked-in to our existing thinking that we don't even see these scenarios. We don't know what we don't know, and we're not asking what we don't know. We can't visualize an outcome that is possibly very different.
This is called the Dunning-Krueger effect, for the two psychologists who discovered it (David Dunning and Justin Krueger of Cornell.) Basically, it says we ignore options. We lose the spark to explore options that don't seem obvious. We lock-in on the way we think about the problem so strongly that potential solutions which are on a different vector – come from a different source – are simply not even considered. As if they could never exist.
And that's why all organizations need outsiders. And not just customers – who are heavily biased toward a better, faster, cheaper status quo. The Dunning-Krueger effect means that all organizations need boards, lawyers, consultants, advisors, friends that don't have their lock-in. People that can come up with scenarios that don't have their lock-in. People that can come up with scenarios that your own organization would simply never consider. Like a drilling rig blowing up in deep water and leaving a spewing hole of crude oil that has to somehow be capped —- that could shut down drilling in a major oil producing area, fishing, and all sorts of other businesses. Possibly wreck part of the ecology for decades. And wipe out the company dividend and customer goodwill while looking for a solution.
by Adam Hartung | Jun 22, 2010 | Current Affairs, Defend & Extend, In the Swamp, Leadership, Lock-in, Web/Tech
According to Reuters news service "Dell in Talks with Google over Chrome O/S." I would like to think this is a big deal for Dell, and positive, but I'm doubtful.
Eight months ago I wrote (10/20/09 – Keep an Eye on Dell – Good Things Happening) that Dell's efforts to bring a smart phone to market showed real promise for the company. Michael Dell seemed committed to shaking things up in order to launch new products. And in February I wrote (2/22/10 Looking for Winners – Dell) not to be too worried about Dell's small desktop market share losses because Dell needed to be heading into new markets – like Smart phones – seeking growth rather than over-investing in its old desktop business.
But I've since turned much more negative. The Reuter's article points out that Dell still hasn't gotten the smart phone to market in the USA. A phone was released in China last year, but sales have been minimal. There is a vague promise (no date) to release a new product in China – but none in the USA. And a potential tablet (competitor to iPad) is considered by end of 2010, but the company stresses no firm date.
Dell is moving far too slowly, and is far too uncommitted, to new businesses. The company is listening to the analysts who have traditionally followed them – the large customers who have bought Microsoft products and are still doing so – and large vendors who want to maintain the status quo. All of these folks are as locked-in as Dell.
Meanwhile Apple and Google keep selling thousands of units into these rapidly expanding new markets, growing share as well as sales at substantial profit.
This effort by Google is certainly good for its Chrome O/S. Even if Dell moves slowly, having Chrome adopted into any part of the historically monopolistic Microsoft community is a good thing. And the announcement itself shows the fragility of Microsoft in its historical market as growth slows and large distributors look to new solutions for "cloud computing" from new vendors. So this is good for Google, and another dart into the wounds of Microsoft.
The market keeps shifting toward new technology and the vendors supporting it – making the re-invention gap bigger and bigger at Dell. I don’t think Dell’s management is up to the market challenges. They had a shot at real change, but by not giving the growth projects (then or now) real permission to do what it takes to succeed, including moving much faster to market, nor sufficient resources to meet market needs, Dell is hastening its own demise. With its outdated, and now low-return, success formula firmly locked in, Dell looks likely to follow Wang, Lanier, Burroughs, DEC, Silicon Graphics and Sun Microsystems into the history books.
by Adam Hartung | Jun 20, 2010 | Current Affairs, In the Rapids, Innovation, Web/Tech, Weblogs
Will YouTube be the USAToday or Wall Street Journal or New York Times of 2015 or 2020? According to Mediapost.com "YouTubes Secret Citizen Journalism Plot Exposed." Referring to a SFWeekly article by Eve Batey "YouTube Explains Top Secret 'News Experiment' to Local Media, But Doesn't Really" the reporting is that YouTube plans to hire groups of citizens in major cities, starting in San Francisco, to report news events via YouTube. Could this replace the local newspaper? Or maybe even the local evening news?
Americans are so used to freedom of speech that it's easy to forget what the concept launched in the USA. 200 years ago anybody who could access a printing press, of any size, could produce a newspaper. That as revolutionary. "Citizen journalism" was the norm, and there were literally thousands of newspapers. That situation remained very true well into the 1900s. Eventually acquisitions led to consolidation and a dramatic reduction in the number of newspapers.
The decline in the number of newspapers was aided by consumer journalism preferences shifting, in part, to radio and television. As radio and television journalism was born the limitation was "bandwidth" and therefore access. Thus, from the beginning there was government control over the number of stations. That scenario very different from the founding of newspapers, as there were limited channels from the beginning. But that didn't mean that the desire for video journalism was lower.
What will journalism be in 2020? We know that most major city newspapers are on the brink of failure, with bankruptcies (such as Tribune Corporation, owner of The Chicago Tribune and The Los Angeles Tkimes as well as others) not uncommon. As newspaper pages have shrunk, the internet has allowed the return of "citizen journalism" as bloggers and reporters have emerged able to tell a story, and with very low cost access to potential readers. Having internet access is possibly cheaper, and certainly easier, than operating a printing press in the era of Benjamin Franklin, or even a local newspaper of 1900. By numbers there is no doubt many more "citizen journalists" than "professional journalists" working at American newspapers today.
So why couldn't YouTube take advantage of a preference for video, and link together the armies of independent "journalists?"
I can't help but recall the television program Max Headroom from 20 years ago – where it was perceived that real-time information on practically all topics would be reported on millions of televisions everywhere – televisions which could not be turned off by law. Wasn't Max simply an avatar, running around what we could now consider the web, popping up on computer – rather than television – screens? Today I can create my own Max Headroom avatar to search the web for real-time content – mostly text. Why couldn't YouTube give me a tool to do the same thing with video?
Many people are bemoaning the decline of traditional journalism. But is this a bad thing? Given all the screaming about today's "media bias" it would seem that citizen journalism could become a great equalizer. If YouTube and Google can help give me the tools to search for what's interesting to me that would seem to be a very good thing. And if in the process they sell some ads so that the content can grow, that doesn't seem like a bad thing either.
In the movie Network, made some 30 years ago, the thesis was put forward that news would become entertainment – and less "news". With the growth of Fox News, MSNBC News and the number of broadcast minutes given to television news magazines like Nightline, one could reasonably claim that the movie was surprisingly foretelling. Today, getting up to the minute news is even hard on a channel like CNN. It's not at all unclear that providing a platform for citizen journalists, via YouTube and Google searches of the web, is a bad thing at all.
Are you prepared? Are you learning how to use these new tools? Are you prepared to change your learning behavior? Your advertising programs? Could you be a citizen journalist? It certainly looks clearer every year that journalism in 2020 will look substantially different than it does in 2010.
