Hierarchies Don't Work As Well As They Used To

Hierarchies are tools that can used to categorize information into groups with logical 'parent-child' relationships. You see them everywhere, but the issue with them is that they are only one person's or one companies opinion of how the world looks. Companies use them extensively to describe their organizational structure, their process models, their product inventories, and this works great when everyone in the organization can be trained to fall into line and talk the same language.

However your customer doesn't always think in the same way as you. Their hierarchy may be different or most likely they don't think about a hiearchy at all! Second, not only are their new categories popping up all the time, but the lines are blurring between many categories. What once fell neatly into a well defined bucket, can produce hours of debate with no right answer.

The concept of folksonomies has become popular with the rise of Web 2.0. Folksonomies are user generated taxonomies or structured use to categorize content typically with the use of tags and tagging. Most people are familiar with tagging, but companies don't often see how this could or should be applied within an organization. However its not an all or northing decision. For example, it would be chaotic to organize your inventory internally through employee or customer created folksonomies (for the purpose of warehousing, ordering etc), but at the same time, why force your customers to try and figure our your archaic structure when they are trying to find a product to purchase? Yes search can help but customer driven folksonomies will help even more AND if tapped can also help search.

The thing is that most people in business today grew up in a world of parent child hierarchies. It has been ingrained in the way we think. Putting things into strict classifications helped us feel in control, but with the pace of change today, structures are quickly outdated and become very painful to re-organize. In our business we constantly fight with trying to classify advertising mediums, (ways in which you could advertise a product). It use to be simple - print, radio, television, direct mail and a few others captures almost everything. The fragmentation in this space is mind boggling now. How do you accurately categorize a blue tooth text messaging cell phone campaign? Or what about a direct mail campain via email. Is it an online offering or direct mail? Well its both but more importantly, it depends on who's doing the searching.

Even stretch your mind to think about internal classification structures. Since I have a background in process engineering, I know that people love to define and map out strict process hierarchies and 'teach' the rest of the organization how the business operates. But could processes be organized into employee created folksonomies to some degree? Process ownership and accountability is still required so its not about letting everyone decide separately how the organization runs itself, but the issue comes when people are trying to 'find' the details of a given process. (maybe for a new software application implementation) Do I find the 'employee onboarding process' under HR, under operations, under IT? (well it actually touches all three and more). Accountabilities aside, if tagging was was available and used, there would probably be a lot of time and argument saved by not having to create a hierarchy that meets everyones view of the world. And most importantly, the person who really needs the information, can find it.

The key point with this is to think about who your customers are (whether internal or external) and what they are trying to do with your information. The easier they can find, store and categorize in their terms, the more likely they will use your information assets in the future. How you categorize and use the data is completely different than how they see or want to use the data. Don't make it your customers problem to understand your structure.

Ideas for the Newspaper Industry

A while ago, I posted about re-thinking the newspaper industry. Here are a couple of ideas I had around innovating in that space. I by no means have any background in this industry, but here goes. In my language customer is defined as a person who gathers utility from reading the contents of a newspaper.

Product Innovation: Allow readers to customize their content. This is not a new concept online. Personalized home pages, email alerts, RSS are all commonplace across the web, and if not already should be integrated into the online channel for the newspaper. This will not only help you better understand what your readers are interested, and allow for better targeted advertising, but will also make them better able to navigate the reams of content available.

Second, in the same vein - appreciate the fact that many of your users don't have an interest in online reading, however that doesn't mean that you should be able to provide them tailored content. Printing innovation is evolving rapidly. Why not allow a subscriber to tell you what they are interested in and have a customer newspaper printed for them based on these interests? Then urge them to go online and rate the content that was delivered so that future papers can further be tailored to their interests. (similar to what some companies are doing to tailor music streaming)

Beyond that I see digital newsstands that would allow a user to select from a menu, and have a custom paper printed off immediately on authentic newsprint (like a soda machine that spits out a newspaper). Plus advertising and print layout would be defined on the fly by software. Further - give people a plastic 'remember me' card, so that they can use with other electronic newsstands, of which get updated every time they make a change (similar to an ATM). Once this is attained - next step is partnering with other news organizations to share/combine content. (Give me the wall street journal combined with Boise local business in one paper!)

Business Model Innovation: Why not create a model where the price of the paper to the end customer varies based on how much advertising they are willing to accept. The more ads, the cheaper the paper becomes. It has been shown that people are willing to pay for advertising free niche content. Think pay-per-view or Sirius. This could initially be packages with varying levels of advertising along with various skews towards types of content (local, sports, business, etc) The content selection would then of course help associate related advertising.

Next combine the two ideas. Allow for infinite tailoring of content to what users need combined with business models that allow pricing to vary by customers interest or lack thereof for advertising, and have any advertising sent be targeted. Meet the long tail needs of your readership.

These may seem unrealistic (or maybe not), but in the end its about thinking on the edges. Most of what I talk about here requires technology and online interactions with consumers, but it doesn't rely solely on the online medium for content delivery.

Now when we get to a point where e-paper is almost as flexible as real paper (we are not that far off), that opens up entirely new opportunities.

Find Your "Creative Place"

Where and when do you do your best creative thinking? Have you ever thought about it? What type of surroundings put your mind in an open state? A friend once told me that he even had creative 'seasons'. He found that spring was his most creative time of the year. Ben McConnell gets bursts of creativity in the shower, and he attributes it to higher ceilings. For quite some time while I traveled for work, my idea flow was very high on airplanes. Now of course if I am stuck in a middle seat near the back this isn't going to be the case, but more often then not, I get off an airplane with a lot of interesting notes scribbled down based on whatever I happened to be reading about. In this case it can't be the high ceilings, but maybe its looking out the windows? I have even written poetry in airplanes at different points, and believe me I am no poet:)

I do believe that the concept of bigger spaces creating better idea flow has merit. The feeling of openness and freedom somehow transfers to thought patterns, making them less constrained. The next logical question is how to create work environments that will allow the idea flow to increase. Since this will be different to different people, much of this will be tapping into your own sensations of creativity and working with it yourself. In contrast with most places I have worked at in the past, my current office environment is very creative for me. It does have high ceilings buts its more a feeling than any ability to articulate why it works. In addition to the ceilings, I think it's the traditional building materials (exposed brick and wood, and steel) that are part of it in addition to the open atmosphere. In contrast, I find new age materials do not stimulate idea flow, even when working in space age pod like set ups I have seen companies try and pull off. Everything seems too manufactured, and it doesn't matter how high the ceiling is.

Additionally, I need some connection to the outdoors. An ability to look out a window, and connect with the biggest open space of all. This of course isn't always feasible but not all your creative thinking needs to be in a designated work space between 8 & 5. Experiment and find different creative places for you. My front porch (view shown in picture) for instance has become a good idea flow space for me (at least when the weather is good). Open air, birds, wind chimes - not sure what it is, but its not really about the how. If it works, be aware of it, and use it.

What works for you?

Social Software - More Than Technology

Came across a thought provoking essay by Danah Boyd about her take on the significance of Social Software. Its an intriguing read if you are interested in the significance of this concept beyond the tech aspects into more about how it is shaping and changing social behavior.

The article begins by giving an interesting history behind the concepts of social software/social computing and the various definitions. As is often the case, researchers and developers are unhappy with 'new' concepts and come out saying that 'they have always been there', however Danah makes a great point that Social software is about a movement, not simply a category of technologies. The author goes on to say:

It’s about recognizing that the era of e-commerce centered business models is over; we’ve moved on to web software that is all about letting people interact with people and data in a fluid way. It’s about recognizing that the web can be more than a broadcast channel; collections of user-generated content can have value. No matter what, it is indeed about the new but the new has nothing to do with technology; it has to do with attitude.

Danah argues that there are three dramatic changes that have been brought on by Social Software:

1. The way in which technologies are designed - The people behind these technologies are approaching design and deployment in fundamentally different ways. The key design values of the social software movement include:

• Hack it up and get it out there
• Learn from your users and evolve the system with them
• Make your presence known to your users and invite them to provide feedback
• When you make mistakes, grovel for forgiveness; your human too.

2. The way that participation spreads - Organic growth is at the heart of social software, but organic growth is not just a means of advertising - it is the primary means in which the culture of a site is formed. Values are built into social software, and spread through the networks of people who join.

3. The way people behave - Along with social software came a new way of building context. Unlike in early social technologies (usenet etc) that were about finding people with similar interests the current movement is about people first and topics second. It is far more about connecting to people and watching shared interests emerge through that. Context is no longer defined by the topic but by egocentric collections of people.

A few observations/thoughts that spring to mind:

On technology - I feel that some of this thinking could help bring traditional waterfall development at large organization out of the stone age. I am not talking about mission critical financial applications, but I think in general most 'internal' customers at companies would rather have in-house software on their desk sooner with a few bugs than wait much longer and realize that it wasn't what they really wanted in the first place.

On Participation - How does this aspect affect deployment of social software in business situations and/or B2B environments. I feel that social software can add tremendous value in the business world, but will competitive thinking stand it the way?

On Behavior- How will this movement impact company cultures as organizations begin to tread down the enterprise 2.0 path and experiment with social software. Will it work at all, given that the context for these applications is born in the consumer and social communities.

Act with Purpose

Have you ever found yourself so busy that you fail to see the forest for the trees? That is, you are so busy doing 'tasks' that you forget why you are doing them? I think this can happen the best of people in any organization large or small. Due to constraints (financial, resource etc) small companies are less likely to do this or at least do it for long before they find themselves out of business, but I believe it is something that you need to remind yourself about every day. I found a quote the other day over at Found+Read that sums this up very well:

Don’t confuse activity for progress.

Time is precious. Act with purpose.

Its not enough to throw this out in a staff meeting, up as a quote on the wall or even as part of your company values unless you also live it every day. Remind yourself regularly, make it a part of what you do, and also part of how you speak. It will then spread to others and become rooted in your culture.

Many times, I believe that large companies could become less bloated, more efficient and effective if they could just embed this simple philosophy, not just as a statement inside their company walls, but as a strand into their cultural fiber.

(By the way a little plug for an item in my blogroll - Found+Read is a fairly new entrepreneurial blog that is a great resource for anything who falls in this category or wants to fall into this category. The other think I like about it, is that it is a blog with some social networking aspects build it - to me this model makes it more 'sticky' than other blogs in your feed list)

Sketching Ideas

There is an article in Business Week that discusses a new book called Sketching User Experience, by Bill Buxton (Microsoft). Although I found the article to not be particularly meaty in terms of useful information, the concept of the book did ring true for me, coming from a background in business and system analysis and based on our current practices at Balihoo.

Inline with what Clayton Christenson describes in The Innovators Solution, Bill explains that companies are often very good at N+1 - enhancements to current products, but often do a very poor job at creating the next 'N'.

When designing new products people often jump straight into building prototypes, which are typically very detailed and can be very expensive. Sketching he says is the place to start:

Sketches, he argues, are quick, inexpensive, disposable, plentiful, offer minimal detail, and suggest and explore rather than confirm. (It should be noted that he doesn't limit "sketches" to pen on paper—a sketch might be digital or three-dimensional.) The value of sketching is less in the artifacts themselves than in the cognitive process of working through dozens of ideas, of considering as many options as possible, and allowing each option to raise new questions.

In our startup we use the concept of 'sketching' extensively to support rapid development.
With 3 week development sprints we create hand-drawn GUI prototypes in preparation for development planning as well as often real time on white boards during sprint planning sessions. A few great reasons to use hand drawn mock-ups:

• They are very fast to develop and easy to re-create.
  
• There is no need for expensive tools that people will spend excessive amounts of time and energy learning and making something look perfect that will likely be out of date in a couple days.
  
• People inherently will provide less suggestions and feedback, the more 'professional' looking the mock up. Rough sketches will make people more open to suggesting changes.
  

If you do need to keep images in soft copy, use a digital camera and take pictures of white boards, or a scanner for paper mocks. (eg - we need to post images of these online to our offshore testing team). Its not just screens - we use sketching concepts to understand and designing new business processes, data relationships, and business models.

What does sketching do for us?

• Articulate fuzzy concepts to others (fuzzy front end)
• Provokes more conversation, challenges, questions, and exploration
• Translates business ideas to developer better than the written equivalent
• Developers feel more empowered to challenge, which ultimately helps create a better product

For this to work we:

• Have a very high 'white board to usable wall space' ratio in the office
  
• Use rapid development processes that do not allow for heavy design (focus on working code)
• promote iterative thinking - Software is like sculpting. Each iteration chips away more of the rough edges. It doesn't have to be perfect the first time.

So what about a prototype? According to Buxton, if sketching is about asking questions, prototyping is about suggesting answers. I would say, let your product be your prototype, and let you customers suggest the answers. However sketching is the place to get you started and moving.

Recognizing Creativity

Creativity is a great word but often hard to describe in a business sense and even harder to grow as an skill. Tom Haskins has a very thoughtful post that can help you identify creativity in yourself, and in doing so provides some great direction to help you grow your own creativity skills as well as those on your team or in your organization.

The key points:

• If you're learning from this, you're being creative. Making sense of new information is creating links, frameworks or containers in your own mind.
• If you wonder where creative ideas and inspired actions come from, you're being creative. With a picture of being open to receive what comes to you, you are in a frame of mind to get more creative.
• If you're thinking this experience is like something else, you're being creative.
• If you see learning happening to you, you're being creative.
• If you're feeling fluid, you're being creative.
• If you're moved by what shows up in your world, you're being creative.
• If you're grateful for what you're given to say, see and think about, you're being creative.

Practice you creativity and help others improve their ability to be creative. Creativity will lead to ideas and ideas will lead to new ways to think about your business and how to be successful.

Thanks for a great post Tom. I read a lot of informative blog posts every day, but I love to find those 'golden nugget posts' that keep you thinking well beyond the point when you flip to your next RSS feed.

Rethinking The Newspaper Industry

Yesterday, I was at a conference on the impacts of new media on marketing for the Capital City Communicators. One of the panel discussions centered around the changing interactions between marketers and journalists. What I found most profound after listening to the panel which included players from both sides - it was yet another example of how baffled, and stubborn most newspaper organizations are regarding the changes in the industry. These changes are rocking the foundation of a business model that is well over 100 years old. They simply have no clue on how to turn things around, so here are 10 thoughts I had after chewing on this issue for a day. I am not a journalist (at least in the mind of a journalist) but maybe that’s a good thing! Its always easier to think on the edges, when you are not trying to defend the status quo.

1. The internet (and other new media) is not just another channel to pipe the exact same print content. Newspaper organizations need to take full advantage of the this channel's ability to provide richer interaction to provide the customer a unique experience will make it valuable and something that can either supplement or provide an alternative to traditional print media.
2. Traditional print was a time of scarcity (of space). Now, scarcity is no longer an issue. With new media you have the ability to make anything available – not just what you think is important. The New York Times tag line has always been ‘All the news that’s fit to print’. Remove this elitist mentality from your thinking.
3. Print is no longer effective for breaking news. It’s a time-to-market issue.
4. Satisfy the long tail of news readers. Editors shouldn’t be choosing the content – they need to figure out ways for their customers to help them, and better yet – figure out ways to create unique content for all users.
5. Use your online channel to better understand customer needs.
6. Every piece of news is news to someone.
7. People will pay for things that they see value in. If given the exact same content across two channels, but one was free, would you pay?
8. Journalists should stop thinking of themselves as only news breakers or news creators. I believe the future is in aggregation. Aggregation of information, diverse opinions, providing local perspectives etc.
9. Don’t just think about readers as customers in your business model – think of them as potential suppliers. Think about the full business ecosystem of a newspaper organization in the new economy.
   
10. You can only have one primary customer. Think hard about who it is, and who it should be in the new economy. Readers? Advertiser? What business models will work based on this perspective?

All well and good to provide this type of commentary as an outsider right, but in a future post I will describe a couple of business ideas I came up with that might help bring a traditional newspaper business over the hump.

Blogging is a Commodity

David Armano posted some thoughts from a presentation he did this past weekend about his experience and learnings with blogging. (Jason Alba took notes as well) Although blogging as a topic is discussed a lot, people are still learning, culture is shifting and there were definitely a few interesting insights he brought up:

You are not 'a Blogger' - you are a person who has something interesting to say. Blogging is a commodity, and anyone can do it. Calling yourself a blogger takes away from what makes you unique. Your talents, passion and personality does.

He discusses this concept and how it relates to your personal/corporate brand. Does your blog represent your extend your brand? Are you writing about what you are interested in or what you think others will be interested in. Are you creating content unique to you with your perspective or recycling content that others have created?

The interesting thing is that these concepts apply not matter if you are a single person with something to say, a sole proprietor of a business, a small business or a large corporation. The key with blogging is to be yourself. This is always so much easier than trying to be someone else anyway.

Allow Users to Experience Magic

At our weekly business breakfast meeting, we had a new member - a seasoned entrepreneur who provided some great insights to our discussions. While telling us a little about himself - he described how a number of years ago he started following a childhood dream of being able to fly his own plane and got his pilots license. He made a great comment (I am paraphrasing):

"Sometimes I get nervous about when people ask me about what type of engine I have in my plane. To be honest, I don't know, and don't really care. Flying is not about the technology, its that magical feeling of leaving the ground."

This comment made me think about how companies should view their products/services. Its not about whats under the hood but the customer need that it is satisfying (basic utility, emotional needs, social needs etc) Some will want to know and see whats inside, but most just want to make their lives, job, task better through its usage. Think about how you can make a product that allows your customer to experience the 'magic of leaving the ground'.

The Reputation Economy

I was at a conference recently where one of the presenters threw out some blogging statistics (unfortunately I don't have the source in my notes). 17% of companies currently are blogging. 35% expect to be blogging by the end of 2007 and 48% have no plans. Almost half of the companies out there have no plans to implement a simple (and almost free) means by which to start meaningful conversations with their customers.

A year ago many companies and executives still didn't even know what a blog was. Now it is unlikely that there is a CEO that doesn't know what one is, however the problem they are trying to figure out now is how to enter into this game without screwing up... and by the way screwing up means different things depending on who you are talking to - Peers, shareholders, investors, customers, industry experts, and other bloggers. Unfortunately it seems that most are just planning to ignore it.

What companies need to understand is that we are now truly in the reputation economy. Of course having a good reputation has always been important, but in the past companies had some means of controlling reputation perception through PR and advertising. Additionally, the mechanisms by which reputation spread was somewhat limited. You may have a good or bad reputation in your town, but move out from there and its like starting over (which could be either a positive or negative depending on the company).

Its similar to the ebola virus. It has always been around, but if it hit a small village it might wipe out the town the it could only spread that far since there were little to no connections outside of the town. Then towns became closer together, and faster means of transportation got developed, and the virus now pops up in many different places and everyone gets in a panic about the new virus...Social software tools are the rapid transportation mechanisms that are allowing reputation virus's spread quickly, pop up in new areas and surprising consumers... and can no longer be contained.

And its not just blogs that determine your reputation now - A plethora of social tools are now going mainstream. Wiki's and social networks from the behemoth mainstream players to the growing population of niche social networks, are the places where your corporate reputation will be determined - not your PR engine.

What makes this entire situation more interesting is that not only are tools available for the market to define your reputation, but whatever they define will be recorded for eternity in search indexes.

So for the nearly 50 percent of companies that have no plans to blog (and presumable no plans to use any other social tools), ignoring the change is not going to solve the problem. The solution is to learn, participate, communicate, and learn some more. Above all be humble.

The Right Channels to Your Customer

The Pew Internet & American Life project has published a new study about the growing digital divide across America. According to John B Horrigan, 31% of America fit into the Elite tech user category, but almost half (49%) fall into the category of 'few Tech Assets'. So for all the hype about Web 2.0, many still do not use it or even care to use it.

Obviously age and other demographic differences play into how people slot into the different groups, but still, in an age where internet advertising is growing rapidly, are companies leaving a large portion of their consumers on the advertising table? There are more channels than every before to reach consumers. As a business, its important to not just follow the hype about internet growth. Be sure you understand who your customers are and how you can best reach them. Second - treat this as an opportunity do draw these customers into a meaningful conversation through new media channels. If they see value in using more interactive channels provided through Web 2.0, they they will begin to use them.

Going Into the Wind

A quote from Mark Cuban:

"If other people are coming to the same conclusion as I am, I think 'This is a business I shouldn't waste my time with'"

Maybe a little over the top, but something to think about. At the same time, don't ever be naive to think that you are the only one with your idea. There are other people with the same idea in their head right now. Its just a question of who has the desire and ability to get to market quickly with the right business model. (Notice I didn't say first to market).

Often, a little competition is good, and a sign of an emerging market. If you are the only one there, is there really a market? Industries with entrants are good. Ones with market leaders are bad. The great thing about the new economy is that ideas are now spawning not just new products and services but entirely new industries.

Going into the wind, and thinking on the edges is the place to start a great new business.

Continuing Evolution of Web 2.0

In some respects the web 2.0 surge has been an amazing open market innovation incubator. It has allowed the market to innovate off in any direction and produce some very interesting products through easy access to open source tools and data offered up freely by large platform vendors through API's. Unfortunately, startups in this space are usually 'cool tools' pretending to be businesses with a revenue model that likely has little depth beyond advertising with Google ad-words.

John Hagel suggests that Web 2.0 is currently going through an evolution, and points out some important considerations for both the entrepreneurs as well as the the platform companies that are supporting these. For startups the days of having no ambition to build sustaining business models beyond a strategy of feeding off of others in hopes for a high priced buy out are quickly coming to an end.

John says that entrepreneurs in this space need to understand these shifts to combat the change in the environment:

First, you can accelerate the innovation in the services you offer so that you are constantly one or two (or more) steps ahead of those tempted to copy you. Second, you can find ways to use your service offerings to build trust-based relationships with your users, ideally with some powerful network effects that will make it very difficult for later entrants to pry these people away from your service. Ideally, these two approaches can be integrated by motivating your users to enhance your services themselves so that the more users you have the better your services become – the essence of Web 2.0.

In addition I feel its important to think about how the plethora of features can be combined, tweaked and used for real business application. Think enterprise 2.0. If there is a business application, there is revenue. Take wikis. They quickly evolved into a feasible tool across many business applications, and although you can still get them for free, there is revenue potential in not only the product but service and support. Even Twitter is in the early stages of evolving into a potential business tool.

In many cases the biggest barrier is not finding a use for these tools in business, but changing the perception of value within organizations. Consumers are more open to change and great proving grounds for concepts that can then be applied in business. The consumer landscape allows you to build and test a network before carrying it into the business world. It is interesting that business software used to drive consumer software, and now it is often the other direction.