Physical to Digital for Value-Add

I have gotten a little behind in my feed reading as of late, and just read this tech crunch post from last week about a new service offering called remote control mail.

"The service provides an alternative to PO Boxes, mail forwarding or waiting until you get home from the road to deal with your mail. The company receives your postal mail, scans the outside of what’s sent to you and provides a web interface to quickly sort through letters, bills, magazines and direct mailings."

Awesome idea with great market potential, but what is really interesting is that this is a great example of taking a very traditional everyday practices and thinking about a solution in an entirely different way. It makes me think about other common practices that could be supported with web based utilities. What other physical things can be digitized to add value? It comes down to looking at, and throwing out institutionalize practices (in this case - P.O. boxes, mail holds etc) that only make situations bearable, to coming up with a truly elegant solution to address the real need.

Even though I am not in a position to require this type of service right now, I would almost be tempted to sign up to block junk mail. It would almost be as simple as marking spam in your email box. What would be great is if you could mark a given sender as junk, and the service would learn and auto filter out future information from them. Gets me thinking about how the direct mail industry will react to this. Some will see this as a threat, but the smart ones will see this as an opportunity.

Six 'C'igma

It seems like these days there is a shift away from extensive frameworks such as Six Sigma. I personally think that in most organizations full-blow Six Sigma initiatives are just too overwhelming to implement. It takes too long to see results, and in many cases the business has already changes, or the issue they are trying to correct has already had a negative impact on the organization. Unfortunately this translates into negative opinions on Six Sigma. I think it's more about effectively using parts and pieces of the framework. Thinking about how to best solve the issue, rather than blindly following Six Sigma steps because you have to. This is one reason why Lean (for both product and service companies) has become so successful. You can see results very quickly and don't need extensive statistical analysis to execute change.

As the business environment continues to change on a more rapid pace, frameworks are becoming more about concepts and patterns rather than strict processes. Jim Carroll has just posted what he is calling the 6 C framework for innovation within companies.

• curiosity
  
• creativity and rebellion
  
• collaboration
  
• change
  
• courage
  
• creating excitement every day

Of course the next logical question by many organizations is how you implement such a framework, so this is where all previous frameworks come into play. By understanding many different processes and tools, it allows you to customize for your own organizational needs. Don't throw out the old tools, just re-configure them to meet current business needs.

Startup mindset

The days of life time employment are over. 5 years even seems like a long time in our current business climate. I think that job security lulled employees into a space of monotony, boundary based decision making, and flat thinking. What would you rather have - life time employment, or life time learning. Finding both is just a myth now.

Don't dispair - a very inspirational post about the mindset of a startup(by Andy Monfried). As stated in previous posts - startup thinking is not just for startups.

Medium vs. Format

Last week I read an interesting article in Wired about the Lonelygirl15 phenomenon on the internet. Lonelygirl is a fictional video blogger, who was exposed as fictional, but has however not faded away but grown in popularity. This is a sign of how our culture and interests are shifting away from not only TV as a medium (the way in which the content is transferred), but also as a format (how the content is presented). To be fair, people do currently use the internet medium to get existing TV based content in the same format due to advantages around viewing convenience, however this is just the beginning. Gen Connect - the current generation of youth want things that ‘do stuff’. TV as a format is passive, and the internet is interactive. People continually want formats that are more interactive and real to them.

Miles Beckett the creator of Lonlygirl15 is thinking about the web as a ‘format’ and Network TV still sees the web as just a ‘medium’. These paragraphs from the wired article sum it up pretty well:

Beckett is clearly frustrated. "The Web isn't just a support system for hit TV shows," he says. "It's a new medium. It requires new storytelling techniques. The way the networks look at the Internet now is like the early days of TV, when announcers would just read radio scripts on camera. It was boring in the same way all this supplemental material is boring."

What's needed, he says, is content that's built specifically for the Web. It doesn't need to be lit like a film -- that would make it feel less real. The camera work should be simple. There shouldn't be a disembodied third-person camera -- a character is always filming the action. Each episode needs to be short, no more than three minutes. "You wouldn't show a sitcom at a movie theater, right?" Beckett says. "You make movies for the big screen, sitcoms for TV, and something else entirely for the Internet. That's the lesson of Lonelygirl15."

Additionally, TV is fast losing its hold on being a primary entertainment delivery mechanism. Today networks see the web as mainly as a support mechanism for TV deliver content and format. Not overly innovative. As Beckett eludes to – the web can and should become a primary medium on its own with possibly ‘TV-like’ content BUT not constrained by the format. The web will not replace TV, just as TV didn’t replace radio or movies, but disrupting thinking on current business models show the innovative possibilities with new mediums.

Manifesto’s to think about

Manifesto: a public declaration of intentions, opinions, objectives, or motives...

Hugh Macleod has been taking submissions for ‘manifesto’s to change the world 500 words at a time' – Here are a couple of good ones to make you think differently about your business:

1. Hugh’s updates (and much shorter) Hughtrain manifesto on marketing. My 3 favorites:

• Your customers are becoming smarter about your market a lot faster than you are
  
• A company's primary role is to function as an "idea amplifier"
  
• The more porous the membrane that separates your business from your market, the easier it is for both parties to be in alignment
  

2. A submission from Rodrigo Dauster entitled the Elusive Customer Manifesto. Couple snips to get you thinking…

• “Don't ask me what I want. To ask is to admit you don't know. If you don't know, it means you haven't been listening.”
• Stop telling me what else I need to be happy. We all know that more this and more that will only lead me into a down-ward spiraling, unfulfilling consumption binge. If you really want to add value -- to be different -- show me how I can get more with less: simplify, defeature, unbundle, open up.

There are certain people that think about the world differently – listen up, and it may allow you to do it as well, and stand out from your competition.

Consultants and Blogging

A consultant is a special breed of professional. They bring specialized skills to help companies manage complexities and undergo change. Because they deal with change and often seek out opportunities in this area they are typically the sort to try out new things such as Blogs. According to Naked Conversations consultants are important to blogging for two reasons:

• Consultants who blog are building reputations that make them category leaders, whether that category is defined by geography or niche. Their opinions are becoming more important in influencing markets.
• Consulting expertise has started to evangelize and deliver blogging into other businesses. They are now seeding blogging into corporate strategies the way they previously germinated PC’s and web sites. We believe they will play key roles in the phase of blog adoption that has started to occur.

In fact, this is very much a win-win situation because blogs are also important to consultants!

Personal Marketing: Blogs allow consultants to market themselves in an authentic way by offering a mechanism to show clients what you think about and how you think about it. Traditionally a web site was where you pointed people, but in my mind the primary vehicle for consultants should be the blog. A website is of secondary importance. The blog is the traffic generator – not the static web site.

Knowledge Sharing & Idea development: Blogs bring a sense of community to a group of individuals who are often on their own for the most part. Its allow the collective knowledge of consultants to be shared in whatever niche you operate in. My philosophy is to share all you know, and it will come back to you in a positive way. I have learned much from consultant bloggers I read from around the globe, and I strive to return the favor. In addition blogs also offer mechanisms to ‘try on’ and explore new concepts with your reading peers, before presenting to clients, and also allows you to share lessons leaned (being careful to protect confidentiality).

If you are a consultant, consider taking the time to blog – you will find it well worth your while. If you have to choose between building a web site and a blog - start with the blog.

My appologies - comments are back on....

I got an email today from a friend and reader(Thanks Valerie!), who informed me that my comments were not turned on! My appologies - I must have flipped the setting by accident, but it has been remedied now, and I invite and encourage comments on my posts. Based on some of my posts - how hypocritical that must have seemed to anyone who tried to leave a comment! Blog-on.

Building Authentic Relationships With Customers

This year, I decided it was time to get some help on organizing my financial assets. I started working with a small firm - Mueller Investments, after getting to know, and trust the team of this small, yet big company.

They just sent out their holiday gift to their clients, and it is a great example of exceptional customer service. It was a box of goodies (food items etc), with a booklet, and it was the booklet, more than the items, that made this holiday gift exceptional. The booklet contained a page for each employee along with a personal story about one of the items in the box, that they had selected for inclusion, and why. The products are as diverse at the team itself – from authentic Mexican hot chocolate to a favorite specialty hot sauce. Long after the products are consumed, I will remember the booklet. In an industry that is moving more towards commoditization, new products and services will help draw customers but a trusting relationship will make them long term partners. Move over Charles Schwab. In the information age, big no longer means better. Another example of Small is the New Big.

'Citizen Marketers' and 'The Tipping Point'

I am excited to read the new book by Ben Mcconnel & Jackie Hubba entitled Citizen Marketers, but in a recent post by Ben on the 4F’s, I couldn’t help but notice the similarities between the 4F's and the concepts introduced in the Malcolm Gladwell’s 2000 book – The Tipping Point around categories of people who have the power to produce social epidemics.

Citizen Marketers F1 – Filters: Filters are human Wire Services. They collect traditional media stories, bloggers’ rants and raves, podcasts, or fan creations about a specific company or brand and then package this information into a daily or near-daily stream of links, story summaries, and observations.

• Tipping Point Parallel - Mavens: A maven is someone who has a disproportionate influence on other members of the network. They are intense gatherers of information and impressions, and so are often the first to pick up on new or nascent trends.

Citizen Marketers F2 – Fanatics: The Fanatics are true believers and evangelists. They love to analyze the daily or weekly progress of a brand, product, organization, or person and prescribe courses of action. They are, essentially, volunteer coaches.

• Tipping Point Parallel - Salesmen: Charismatic people with powerful negotiation skills. They exert "soft" influence rather than forceful power. Their source of influence may be the tendency of others, subconsciously, to imitate them rather than techniques of conscious persuasion.

Citizen Marketers F3 – Facilitators: Facilitators are community creators. Their primary citizen marketer tool is a Web-based bulletin board or community software. Facilitators are like the mayors of online towns, and some online communities exceed the populations of small cities.

• Tipping Point Parallel - Connectors: Those with wide social circles. They are the "hubs" of the human social network and responsible for the small world phenomenon. They are the kinds of people who know everyone.

The 4^th 'F' in the Citizen Marketers is a Firecracker. Firecrackers are the one-hit wonders of citizen marketers. They can attract considerable attention because they have created a song, animation, video, or novelty that generates a lot of interest but tends to die out quickly as the creators go on with their other work.

• The interesting thing about a firecracker is that they wouldn’t make it very far without the easily available production tools and the support (although short sometimes) of the other 3 F’s and their equivalent Tipping point persona.

The fact that they are similar is probably no coincidence. The concept of The Tipping Point, is exactly why Citizen Marketing is successful.

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Web 3.0

It seems that the web is reinventing itself (at least by creative Journalists) faster than Microsoft releases new versions of its software.... I thought that this cartoon/post by Hugh Macleod seemed appropriate.

Social Media Relations

On the Net-Savvy Executive Blog there is a post about yet another up-and-coming role in the corporate world around Social Media Relations. I have heard people talk about blogger relations, but as this post points out, it should be much more broad to include all types of social media. I posted a while back about monitoring Wikipedia, which would fall in this category.

Nathan Gilliatt – the bogs owner says:
"I view social media relations (SMR) as an interdisciplinary specialty that spans marketing, technology, and Internet culture—three components of any successful strategy for engaging social media. It's probably an internal function, but where it belongs on the org chart and how big it should be is a question for individual companies to consider."

When company leadership eventually picks up on this the likely reaction might be to let the role fall to someone in IT but as one commenter (toby) pointed out, that it fall under marketing. I agree that social media isn't IT, but I don't think it's marketing either. I am not sure that many marketing departments could handle this role, at least today. Its technology, marketing, customer/public relations, customer services, and even R&D and Product management to some degree. The SMR will truly need to be able to bridge across many groups within an organization to be successful.

Blogs as an Extension to Your Resume

When you attempt to sell your offering to the job market, the traditional tool for this has always been a resume. Resumes are the ‘traditional media’ way to advertise your skill set. They are somewhat impersonal, and one dimensional in what they communicate (a list of skills and accomplishments). As with traditional media there was a time when this method was highly effective – when knowing a skill was all that mattered to carrying out a job. Now as we have progressed away from office workers, through knowledge workers and more towards self directed innovators, a resume with a list of skills doesn’t really seem to tell the whole story.

Now, just as blogs are allowing companies to create more authentic relationships and better communication with their customers, so too could it be used to help with personal marketing and fill in where traditional resumes leave off. This is not about taking the contents of your resume and posting it on a blog. (Some marketers in companies made this mistake by trying to advertising products through a blog). A blog can give you an opportunity to show prospective employers/clients how you think. As jobs become less task based (where the tools matter) to more about the optimal application of those tools to solve business problems in innovative ways, a blog can be a mechanism to showcase this.

Also, just as new media won’t replace traditional media in the corporate marketing sense; neither will blogs fully replace the resume. It’s about correct application of the tools to optimize success, and what you want out of your career. If you want to be an office worker – use a resume. If you want to be a self directed innovator, try using a blog.

Chairlift Strategy

Last week I saw this year's Warren Miller film (Off the Grid) and last night I was at a back country ski film night put on by the Winter Wildlands Alliance. Needless to say I am getting pumped to get out into the white stuff, as it now is starting to blanket the local foothills. In addition to the fun and exhilaration in the fresh air, I find that ski hills offer a great place to free your mind and think differently about your life and work. I call it Chairlift Strategy. A friend and mentor of mine tried this concept late last season, and it was very successful. We grabbed our boards, took the afternoon off work, drove the 40 minutes to the local ski hill and talked some business on the chairlift, and focused totally on the fun of the sport on the way down the hill.

We talked back and forth about his small business, current and future business strategy, goals etc to see how he might be able to take the model in a different direction, deal with issues the business is facing etc. I think the frequent mental breaks (going down the hill) were very useful. I am a big believer that your brain processes things unconsciously, once it hears a concept, so quite often we would have new thoughts on the ride up that we didn't have on the last ride. Additionally, not being in a typical brainstorming environment (such as an office, or even a coffee shop), I think ideas flowed 'differently' because of the wildly different surroundings that constantly changing scenery as we moved around the mountain. Now, of course not everyone has a mountain near them, but I think the key is the physical activity of the sport, and not the sport itself. I believe it has to do with the drastic contrast between physical activity followed by short bursts of mental activity, that make is successful. (I am no scientist so don't ask my why)

So if you need to re-think pieces of your business, grab a colleague, and head to the ski hill. Golfing is for schmoozing clients, selling, and negotiations - ski hills are for innovative thinking.

Blueline: New Media Conference

Be Your Own Media was the title of a one day conference held yesterday at BSU by a local grassroots marketing firm Blueline on using new media to create more authentic two way connections with your customers. It was the second event by this name held this year (first event was in April), and based on some questions asked of the audience early in the morning by Blueline New Media guy Tac Andersen it was encouraging to see that the concept of new media has definitely progresses in the past 6 months from being limited to the local innovators to at least the early adopter crowd based on current spread of knowledge on new media mechanisms, active bloggers in the crowd as well as conference attendance in general. And similar to the shift and emergence of new media marketing - so has Blueline itself, with a new look and feel as was as a company strategy that appears to be focusing more clearly on grassroots marketing. Congrats on finding focus.

Couple concepts I found interesting:
1. Napsterize your Knowledge

Not a new concept, but I like the way they phrased it. This is the concept that if you give knowledge away for free, you can still have a viable business (disregard the fact that Napster got sued out of business for their disruptive business model:). Many companies think that if they give information away, they will have nothing to bring to the table for their clients, but it is completely the opposite. The information builds trust between you and your customer on your ability to deliver. Maybe they could take this information and do it for themselves, but typically that is not their business and when they need someone to deliver a service, who will be top of mind for them?

2. Four points raised from a Book called Pyro Marketing by Greg Stielstra as it related creating customer evangelists (high on the metaphor scale which makes it easier to burn into your mind)

• Gather the driest tinder
• Touch it with a match
• Fan the flames
• Save the coals

3. Rule # 1 with New media marketing: Its not about generating traffic, its about creating relationships

Many people equate blog readership as the yardstick of success, and while this can bring notoriety and possibly some add revenue, blogs can still be a success with only a few niche readers. The 'Volume = success' is a carry over from legacy media in my view (e.g. TV media). If you have 10 readers of your blog, that actually would hire or recommend to you, wouldn't you consider that a success?

All in all the conference was a great value for the $25 attendance fee with the content as well as the opportunity to network with others people interested in this space.

Innovation: Eliminate a Customer Sacrifice

Most companies innovate to meet a customer need, a 'perceived' customer need, or sometimes they just innovate in hopes of creating a need. Many times they miss the mark. Recently, in an interview with Innovation expert Charles Thompson, on Gordon Whyte's blog Thompson says:

Most people think innovation is about meeting a customer need. I believe innovation is about eliminating a customer sacrifice.

For example, let’s look at health care in America. The number one customer sacrifice is waiting — waiting to get appointments, waiting in the lobby. Along comes a company called The Minute Clinic, which was recently bought by CVS Pharmacies. Their slogan is “You’re sick – We’re quick.” No appointment necessary. Walk into the clinic, housed conveniently at the CVS drugstore, and within 15 minutes you’ll see a nurse-practitioner. This is breaking the mold of the traditional healthcare model. How? By eliminating a customer sacrifice....

Businesses need to identify customer sacrifices and then overcome them. If they do that, they end up exceeded expectations. A good thing.

The paragraph above on health care reminded me of another great article entitled 'The Innovation Sandbox' in the Autumn 06 Strategy+ Business that talked about the concept of cultivating constraints. The article elaborates on developing breakthrough innovations in countries such as India, that starts with the identification of the following conditions:

• The innovation must result in a product or service of world-class quality.
• The innovation must achieve a significant price reduction — at least 90 percent off the cost of a comparable product or service in the West.
• The innovation must be scalable: It must be able to be produced, marketed, and used in many locales and circumstances.
• The innovation must be affordable at the bottom of the economic pyramid, reaching people with the lowest levels of income in any given society.

This 'constraint based thinking' is studied with two breakthrough innovations in the health care industry of India. One, for example was the production of a rubber prosthetic called the 'Jaipur Foot' costing the customer $30 compared to $8000 - $10,000 of most western made prosthetics. This is a great article on innovative thinking. I think some of these principals could be applied equally well to the health care industry in the west. This industry is ripe for overhaul by disruptive business models such as the ones described here.

Market Segment Targeting

Entrepreneurs (including myself) often suffer from a lack of focus. By nature we tend to be crafting new ideas constantly. Although this is good for keeping your business idea on the cutting edge, it can be detrimental to trying to get something to the right market, and just getting to market at all. With limited time and resources, focus can help. Yesterday I had coffee with one of the judges from the recent start-up speed dating event I participated in, and we walked through a model to help clarify a companies focus and sweet spot. (Thanks to Dave Hallmen for the insightful discussion)

• Technology(horizontal): This is the value proposition that you are offering. Different customers may more or less need for parts of your value prop, but this is not typically market dependant. If have a focus here, there is typically some underlying IP you are working on, and you should be spending a large portion of your efforts on R&D, since your goal is likely to sell the technology to someone else who will take it to market.
  

• Market Segment(vertical): If part of what you are offering, has unique applicability to certain market segments, or you feel that for example your offering has better applicability in certain areas, make a conscious decision to focus your efforts on these areas. Become an expert in those areas of focus, and understanding how to market to these segements is important.
  

• Functional Application(diagonal): Decide if your offering has unique application within a specific business function. Look at the intersection of this with the market segments to drive even more focus with limited time and resources.
  

Looking at your offering based on these 3 dimensions will likely not change your idea or the concept that you are offering, but hopefully it will make you think about focusing in order to better understand what you are building, who you are building it for, and how they will best use it for competitive advantage.

Personal Fabrication Printer

In The Long Tail by Chris Anderson, he talks about printers in the future that could manufacture items at home say out of a block of plastic, as the long tail continues to stretch further and further with niche products. Now there is an article in Fortune this month, MIT Physicist Niel Gershenfeld says that the digital revolution is over, and the next big change will be in manufacturing, where you will be able to fabricate your own products at home by hitting print on your PC. Gershenfeld says that until recently this wouldn't likely be much more than an MIT project, but he says that there is an emerging community in Personal work group fabrication. There are two major hurdles - technology and finance. Gershenfeld is not concerned about technology and says we should be there in about 20 years.

"Today your all-in-one device prints, scans, faxes and copies. Tomorrow it will cut, score, etch and sew."

This takes customer driven innovation to an entirely new level. As this opportunity becomes closer to reality, it is going to dramatically shift the nature of business in the consumer goods space. Instead of going to the store and buying a toy for my child, I can make some minor modifications and create a unique variation just for him.

I feel that this innovation will cause manufactures to encounter the same struggles that the music and media industry is going through today. As with media, it seems that there is a large opportunity for entirely new business models to be created out of this shift. In the toy example, you could not only sell physical products to the consumer, but also design models, and give some rights to modify, submit designs back to the company and profit sharing when others use the modified idea. Lego is already doing this on the design side, and is a likely candiate where this type of consumer fabrication innovation will hit first. Think about how this concept could impact your business. Yes, it won't be here tomorrow, but why not think about it now, instead of waiting until it happens and being forced to degenerate into suing consumers because of your own lack of foresight. Look at it as an opportunity instead of a threat.

Lesson In New Economy Marketing

New economy marketing and marketing in general is a huge interest area of mine these days, and I have been on a quest to learn as much as possible over the past year. During this discovery process I found Seth Godin and his blog. A marketing guy with not only good information but an interesting perspective in his area of authority. So after reading his blog for a while, I bought his most recent book (my first book from him) ‘small is the new big'.

Unfortunately, this book is difficult to summarize, since it is a compilation of his thoughts, but I highly recommend it because it is much more than a marketing book. For me it was a book about entrepreneurial thinking, and motivation. I bought the audio version to listen in the car and actually found myself frustrated listening it. The content was great because it spurred so many thoughts in my head. Unfortunately, just as I would try to expand on one thought, Seth would be on to his next riff, and my mind would be forced to shift also. (Aside: It would be great if my iPod could be paused and take voice notes which I could tag to a bookmarked location in an audio book). I finished it yesterday on the way into work and it is likely that I will buy the print version, so I can go back and tag pages and rethink about the ideas that were flowing when I listened. In addition to this book, I have also downloaded some of his e-books and, and recently sent him an email about a riff I had. (Which he responded to within a few hours)

What I realized is that I just participated in my own lesson on the topic I have been researching.

• I got a reference to Seth through some blog post (I can even remember where)
• I read his self generated/free blog content that is updated regularly, and sold me on his topic authority
• I decided to buy a book (that is really just a collection of his free blog posts)
• I have read it and recommended it to others
• I have downloaded his e-books, and will likely buy other books
• I sent him an email and got an got an actual (non automated) response.

He has built an authentic relationship with a customer who didn’t even know of him a year ago. He generated a few dollars from a book sale, but the real value downstream revenues from word of mouth marketing. Marketing cost to him = just his time, and passion.

Stimulating as Black Coffee

I came across this quote this morning:


"Good communication is as stimulating as black coffee and just as hard to sleep after."
--Anne Morrow Lindbergh, aviation pioneer, writer


This exemplifies why new media options used to create meaningful two-way conversations with your customers (eg. Blogs) are powerful marketing tools. One-way marketing puts your customers to sleep, two-way marketing gets them engaged.

Agile Learning

A while back I blogged about creating innovative education. Kathy Sierra, recently wrote a great post about the current state of math/science in the US.

If you studied math, science, or engineering at a four-year college in the US, much of what you learned is useless, forgotten, or obsolete. All that money, all that time, all that wasted talent. If all we lost were a few years, no big deal. But the really scary part is that we never learned what matters most to true experts in math, science, and engineering. We never really learned how to DO math, science, and engineering....

Our educational institutions--at every level--need drastic changes or we're all screwed. The generation of students we're turning out today need skills nobody really cared about 50, 40, even 20 years ago. Where we used to prepare students for a "job for life", now we must prepare students to be jobless. We must prepare them to think fast, learn faster, and unlearn even faster ....The Waterfall Model of education is failing like never before. We need Agile Learning.

Some additional thoughts on this topic:

• In the realm of software development Agile is more about a state of mind, than a set of skills & methods, and one of the keys to Agile success is having experiences and training to allow help practitioners how to make the write decisions. How do we then teach agile learning without experience - by teaching through experience showing students how to fail quickly, and learn from mistakes.
• Agile learning should be facilitated through learning frameworks instead of the current model of "checklists" learning. Again, like Agile software development - quality and a great end product is not ensured with a checklist - it is about embedding quality and adaptability into the process.
• Education is about building up a tool belt to equip the student when they go out into the real world. Today we teach the theory behind a hammer, and the mechanics of swinging a hammer, but less about keeping the nail straight, when to use a screw (and screwdriver) instead, or how to select a different tool if conditions change.

I once had a case interview for a large financial services company. I was presented with a simple business problem that was dealt with in the business. Although this was a new industry segment for me, I could solve this problem by using math or business tools from my tool belt. Then as soon as i finished problem, a 'twist' was thrown in (more information, changing conditions), where I had to re-think my response. Once I finished, another twist was added. This continued in fairly rapid-fire succession. By the end of the interview, my brain was fried, and I thought I had failed miserably, but I got the job. The interview was about my ability to think creatively, react to changing conditions, and thinking on the fly, and less about whether I gave the exact right response. This to me, is the essence of business in the new economy today, what agile learning is about, and unfortunately not what we teach.

Porter: Bermuda Triangle Strategy

Michael Porter recently spoke at Wharton on the topic of "Why do Good Managers set Bad Strategies". In this discussion porter starts out by saying that most strategic errors are not caused by external factors, but come from within. He goes on to discuss what strategy isn't. Here is a particularly good excerpt:

"'Strategy' is a word that gets used in so many ways with so many meanings that" it can end up being meaningless. Often corporate executives will confuse strategy with aspiration. For example, a company that proclaims its strategy is to become a technological leader or to consolidate the industry has not described a strategy, but a goal. "Strategy has to do with what will make you unique," Porter noted. Companies also make the mistake of confusing strategy with an action, such as a merger or outsourcing. "Is that a strategy? No. It doesn't tell what unique position you will occupy."

In this article he introduces the concept of the Bermuda Triangle of Strategy, which is the confusion over economic value and shareholder performance.

"We have had this horrendous decade where people thought the goal of a company is shareholder value. Shareholder value is a result. Shareholder value comes from creating superior economic performance."

Some key points I pulled from the remaining discussion:

• To think that stock price on any one day, or at any one minute, is an accurate reflection of true economic value is dangerous.
• Corporate strategy cannot be done without strong quantitative analysis.
• Companies hoping to build a successful strategy need to define the right industry and the right products and services. Bad strategy often flows from a bad definition of the business.
• Confusing operational effectiveness with strategy - Good operations can drive good performance, but its hard to sustain. If its a good practice everyone will do it.
• You have to keep up with best practices while solidifying, clarifying and enhancing your unique positions.
• Don't let incremental improvements in operations crowd out the larger strategy of building a unique business that will retain its competitive advantage - keep competitive strategy in mind at all times.
• The key principles of strategic positioning, is a unique value proposition, a tailored value chain, clear trade offs in choosing what not to do, and strategic continuation, or ongoing improvement. The underpinnings of strategy are "activities that fit together and reinvigorate each other.
• Continuity is critical to successful strategy - If you don't do it often, it's not strategy
  A capital market bias can be a barrier to strategy - when equity compensation is tied to share price people become overly attentive to financial market tactics (eg. mergers, acquisitions), and can make poor decisions.
• Importance of Leadership on strategy: Strategy is challenged every day, and only a strong leader can remain on course when confronted with well-intentioned ideas that would deviate from the company's strategy.
• Corp strategy should not be kept a secret. Openness and clarity of strategy will help everyone in the organization understand the strategy and align everything they do with that strategy every day.

The more I read today about capital markets, and the downsides to having to answer to a group of shareholders that often know little to nothing about the business you are in, too focused on short term financial returns, and rapid growth at all costs, bodes with the concept of staying small and agile, to have the 'appropriate mix' of shareholders, who align with your strategy. Small does not mean less profitable in the new economy.

The Starbucks Test - Long Format

You may have heard about the widely blogged 'Starbucks Test' by Bob Sutton. He calls it the Asshole metric. If you haven't here it is:

The more complicated the Starbucks order, the bigger the asshole. If you walk into a Starbucks and someone orders a "decaf grande half-soy, half-low fat, iced vanilla, double-shot, gingerbread cappuccino, extra dry, light ice, with one Sweet-n'-Low and one NutraSweet," you are in the presence of an asshole.

Now before you get all flustered with the use of this term, you have to admit that you know exactly what it means in the context of business, and something that everyone has dealt with. Now Bob has a new book coming out called "The No Asshole Rule: Building a Civilized workplace, and surviving one that isn't". Its not available yet, but Guy Kawasaki, gives a thorough review of the book.

It might be a refreshing change from the typical, dry 'stuff shirt' business books often written, and based on this review, I think its probably worth a read. Plus, being an analytical guy I am interested in find out more about a topic in his book called TCA (Total Cost of Assholes).

Creating Rifts in a Flat World

If you have read Thomas Friedman's "The World Is Flat" you know all about this concept, and how you need to think about these concepts as you move your business forward in the new economy. Jim Carroll points out however that once people, companies or even countries get this concept, they have spent so much time focused on cost and efficiencies of the flat world they they often don't know where to go next...when flat becomes the status-quo. He suggests that this is exactly the time to put a ripple in the flat world with innovation. He then suggests some ways to ways to go about this:

• Focus on brand
• Go big on quality
• Get Religious on time-to-market
• Go deep with market knowledge
• Increase value
• Focus on agility
• Seek partners
• Go upside down
• Stay motivated

The interesting thing is that for the most part, this is exactly what start-ups do innately. That is precisely why they are coming into existing markets, transforming them with new ideas and often crushing existing players. While the existing players are still trying to figure out how to play in a flat world, the new players already there, and purely focused on innovation, because that is all they really have to compete with. As Seth Godin preaches 'small is the new big'. Act small - think big.

New Economy IT Department Transition

As IT shops are being forced to become more accountable for their spend and to prove value-add, it still surprises me the trouble that some shops are having at making this transition. The interesting thing is that most of it is about attitude, and not about a lack of skills or technical knowledge. Earlier this year I wrote down a list of successful tacktics to complete this transition and here are a few of them:

Connect IT to Business Strategy: If your technology strategy is not connected and driven by the business strategy, it is unlikely that you will achieve the highest value-add potential. In addition, develop an IT balanced scorecard as part of this strategy, that includes items that are pain points with the business. Adding items that you score well on but don't particularly matter to the business strategy is enticing to some, but not particularly useful. Support this with an ongoing IT Steering committee with Senior business leaders so that IT direction can be proactively managed.

Shift the IT Culture to that of a Consultancy: It is important for everyone in IT to understand that they are a cost center. Most shops already have felt or understand the idea that the business has choice in this area. Think like a consultant - remember who is paying your 'rates', be polite, be flexible, and deliver value added services. So what value added services can differentiate an internal shop from outside competition. The best way to do this is deep knowledge of the business domain, used to deliver the right products based on customer needs in an efficient manner. This can also be helped by hiring technical people that care about the business. Avoid technical people who just care about the next new software app they can put on their resume (unless software is your business).

Create Shared Ownership: Try to move away from segregation between IT and 'the business'. Bringing the groups together can go a long way to creating synergies. Try creating oversight groups in areas that there is obvious cross over. Business Intelligence/Data Management and Process Management are two good examples. Another option is to develop a model where cross functional action teams are created to address business/IT issues. There is usually some component of both, and this puts everyone in the same boat for resolution instead of finger pointing.

Create an Environment of Mutual Respect: It is important for both members of the IT department and the business customers respect that value that each brings to the table. This will increase trust and thereby increase speed and reduce costs. The IT department should work to find and nurture business champions for IT. Just like client referrals, appropriate business champions from successful initiatives can go a long way building better relationships. Bring business personnel into IT process improvement initiatives. They will get a better understanding for IT processes and bring a unique perspective. Bring IT personnel into business process improvement initiatives. IT personnel often have a cross functional view of the org. that business silos do not. IT should make special effort to try and better understand the business, and really reach out to understand customer needs. An great example of a 'respect builder' in one place I worked there was a program called 'keeping in touch', where all professional staff (both business and IT) sat with call center personal for minimally an hour a month to listen to customer calls, see how they used IT systems to do their job. Sitting directly with true end users can bring amazing clarity.