22.7.09
22.5.09
Google Searches for Staffing Answers
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By SCOTT MORRISON
Concerned a brain drain could hurt its long-term ability to compete, Google Inc. is tackling the problem with its typical tool: an algorithm.
The Internet search giant recently began crunching data from employee reviews and promotion and pay histories in a mathematical formula Google says can identify which of its 20,000 employees are most likely to quit.
Google officials are reluctant to share details of the formula, which is still being tested. The inputs include information from surveys and peer reviews, and Google says the algorithm already has identified employees who felt underused, a key complaint among those who contemplate leaving.
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Digits: Internet Archive Founder Questions Google Books Settlement
Applying a complex equation to a basic human-resource problem is pure Google, a company that made using heavy data to drive decisions one of its "Ten Golden Rules" outlined in 2005.
Edward Lawler, director of the Center for Effective Organizations at the University of Southern California, said Google is one of a few companies that are early in taking a more quantitative approach to personnel decisions.
"They are clearly ahead of the curve, but a lot of companies are waking up to the fact that there is a lot of modeling that can provide you with critical data on human capital," Mr. Lawler said.
Associated Press
Current and former Googlers said the company is losing talent because some employees feel they can't make the same impact as the company matures.
The move is one of a series Google has made to prevent its most promising engineers, designers and sales executives from leaving at a time when its once-powerful draws -- a start-up atmosphere and soaring stock price -- have been diluted by its growing size. The data crunching supplements more traditional measures like employee training and leadership meetings to evaluate talent.
Google's algorithm helps the company "get inside people's heads even before they know they might leave," said Laszlo Bock, who runs human resources for the company.
Concerns about a talent exodus have revived in recent weeks amid the departures of top executives, including advertising sales boss Tim Armstrong and display-advertising chief David Rosenblatt. Meanwhile, midlevel employees like lead designer Doug Bowman, engineering director Steve Horowitz and search-quality chief Santosh Jayaram continue to decamp to hot start-ups like Facebook Inc. and Twitter Inc.
Journal Community
DISCUSS
"
Google needs to develop a human touch vs. always looking to tech.
"
— Gregory Lynn
Current and former Googlers said the company is losing talent because some employees feel they can't make the same impact as the company matures. Several said Google provides little formal career planning, and some found the company's human-resources programs too impersonal.
"They need to come up with ways to keep people engaged," said Valerie Frederickson, a Silicon Valley personnel consultant who has worked with former Google employees. "If Google was doing this enough, they wouldn't be losing all these people."
Google spokesman Matt Furman said the chance to contribute to "constant and often amazing innovation" keeps employees engaged. The company is determined to retain top product managers and engineers.
Google wouldn't say how many people have left, but says it has managed to hang on to its most important staffers. "We haven't seen the most critical people leave," Mr. Bock said.
Write to Scott Morrison at scott.morrison@dowjones.com
Cool bike!!
http://www.ted.com/index.php/talks/lang/eng/yves_behar_s_supercharged_motorcycle_design.html
Merci/ thanks
________________________________________________________________
Jean-François Barsoum, MBA
Senior Managing Consultant & Practice Leader, Green + Innovation Strategies
ibm +1.514.964.4192 :: fax +1.845.491.2412 :: jbarsoum@ca.ibm.com
IBM Canada: Suite 400, 1360 boul. René-Lévesque Ouest, Montréal (QC) H3G 2W6
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29.1.09
When IBM Beats Facebook And Twitter: Discover Relevant People Within Your Network
http://www.techcrunchit.com/2009/01/29/when-ibm-beats-facebook-and-twitter-discover-relevant-people-within-your-network/
When IBM Beats Facebook And Twitter: Discover Relevant People Within Your Network
5 Comments
by Jeff Widman on January 29, 2009
When twitter recently added a "Suggested Friends" feature, I was more than a little disappointed. Unlike Facebook's "People You May Know" feature, no explanation is provided for why these people were suggested.
The larger the organization, the more likely someone else is working on the same problem. And the less likely you'll find them.
Automatic "Friend Suggestions" shift the connector role from people to software. These suggestion algorithms can use all sorts of data, from mutual friends to similar content (if we both tweet the same thing) to match relevant people. If you have the data, there's a million ways to slice it. But every attempt I've seen seems mediocre at best.
While touring IBM's Innovation lab at Lotusphere last week, I was surprised to see IBM is also tackling this problem with their "Social Networks & Discovery" project (SaND for short). And it looked FAR better than anything I've seen previously.
Their relevant person suggestion engine (screenshot above) uses mutual connections across multiple networks, shared knowledge tags, and even values certain connections above others (like a mutual boss).
Perhaps even more interesting, the IBM aggregation and filtering system works on any entity in a system–people, textual documents, or meta-information (tags). Like Google, searching on any term returns a ranked results list. But unlike Google, pausing over a link shows the relationships between people, tags, and documents (screenshot below).
As I tweeted earlier this week, I rarely read RSS anymore. Too much content, too little time. As this information proliferation grows–on both sides of the firewall–filtering relevant people and content will only become more necessary.
This is still in the research phase, and isn't shipping in any IBM products yet, but I expect to see it in Lotus Connections fairly soon.
(Hat Tip to TechCrunch fan Ido Guy–an IBM researcher on another project, he pointed this out to me and said, "No one else in consumer or enterprise is doing this yet.")
26.1.09
If you like mind maps....
You might like this http://www.amap.org.uk/
Story: http://www.techcrunch.com/2009/01/26/make-amap-of-your-best-arguments/
19.1.09
Flaws in strategic decision making: McKinsey Global Survey Results
Note: "executives at companies with satisfactory outcomes ... [ensure] that truly innovative ideas reached senior managers."
Flaws in strategic decision making: McKinsey Global Survey Results
Irrational thinking doesn't just affect individual economic decisions; it affects corporate strategic planning as well. These results highlight the practices of companies that have made successful strategic decisions—and also reveal what the same companies have gotten wrong.
January 2009
Since its inception nearly three decades ago, behavioral economics has upset the pristine premise of classical economic theory—the view that individuals will always behave rationally to achieve the best possible outcome. Today it's clear that the vagaries of individual and group psychology can cause irrational decision making by both individuals and organizations, resulting in less than ideal outcomes. Even the best-designed strategic-planning processes don't always lead to optimal decisions. A recent survey by McKinsey attempts to assess the frequency and intensity of the most common managerial biases in companies. Specifically, we asked executives about a single recent strategic decision at their companies that had a clearly satisfactory or unsatisfactory outcome, focusing on the role that various biases may have played.1
It's evident from the results that satisfactory outcomes are associated with less bias, thanks to robust debate, an objective assessment of facts, and a realistic assessment of corporate capabilities. A few clear paths to making successful decisions also are apparent. But even when a decision had a satisfactory outcome, executives note several areas where their companies aren't all that effective, such as aligning incentives with strategic objectives and forecasting competitors' reactions.2 Also notable is that companies that typically make good decisions focus more on their own ability to execute than other companies do, regardless of the outcome of the particular decision described in the survey.
Notes
1The McKinsey Quarterly conducted the survey in October 2008 and received responses from 2,207 executives representing a global range of industries, regions, and functional specialties.
2This is in line with the results of another survey on how companies respond to competition. See "How companies respond to competitors: A McKinsey Global Survey," mckinseyquarterly.com, May 2008.
When all goes well
Most companies work hard to make their strategic decision-making processes as rigorous as possible. And when executives are satisfied with the outcome of their decisions, they tend to rate their companies' processes highly in terms of practices that avoid many biases, though some do creep in (Exhibit 1).3
Companies that reach satisfactory outcomes do so in a few different ways, and three distinct themes emerge from executives' responses. The first theme is assessment: at companies with satisfactory outcomes, executives give their processes high marks for forecasting demand and competitor reaction, assessing their own capabilities, and tailoring their evaluation approach to the specific decision.
The second theme is process: executives at companies with satisfactory outcomes rate their processes highly when it comes to seeking contrary evidence and ensuring that decision makers had all the critical information, giving dissenting voices the floor, reviewing the business case thoroughly even though senior executives were strongly in favor, and ensuring that truly innovative ideas reached senior managers.
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And the third theme is a focus on targets: the satisfied respondents assign high ratings to aligning incentives and basing the decision on a mix of financial and strategic targets as well as on a mix of short- and long-term targets.
It's also notable that at companies where executives rate their strategic decisions overall as good, they are much likelier than others to say the company's assessment of its own capability to carry out the particular decision was realistic, regardless of whether this decision had a good or bad outcome (Exhibit 2). Indeed, at companies with good overall processes, realistic assessment of execution capabilities is the third highest-rated activity, regardless of whether the particular decision had a satisfactory outcome. While at companies that make poor decisions overall, realistic assessment of execution ranks sixth for respondents evaluating a satisfactory decision and tenth for respondents evaluating a poor decision.
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Notes
3Though there is a well-known tendency among people to rate themselves or their companies highly on specifics when they also think they do well in general, the differences in the intensity of the biases asked about here nonetheless provide a clear understanding of what executives think they do well and less well.
What goes wrong
At companies where the outcome of the decision was unsatisfactory, respondents generally rate themselves lower across the board. As one would expect, compared with the executives who are satisfied with their business results, they are less likely to say they have adequately used all the practices associated with successful decision making (Exhibit 3).
Further, regardless of what type of decision a company was making or what the outcome was, the best practice cited least often is that of actively seeking evidence contrary to the initial plan.
Decisions on certain subjects, whether leading to satisfactory or unsatisfactory outcomes, tend to include or avoid similar practices aimed at preventing bias. For example, whether the outcome was satisfactory or not, marketing decisions incorporate more of the best practices than any other single type of decision (Exhibit 4). Perhaps this is because companies make these types of decisions relatively often. Merger or acquisition decisions, which by nature tend to be less frequent, are the most likely to be missing elements of good decision making when the outcomes were poor.
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Looking ahead
- One of the most frequent practices at companies that make good decisions is the accurate assessment of execution capabilities, indicating that managers should increase their focus on this element when considering strategic options.
- Even satisfactory decisions tend to overlook a good assessment of competitors' reactions or a good alignment of individual incentives with strategic objectives, suggesting that all companies can improve their decision making by focusing on these practices.
- Given the prevalence of individual and group biases in decision making that these findings highlight, managers could likely make better decisions by actively experimenting with alternative techniques such as prediction markets or other collective intelligence tools, which can nullify many pervasive biases.
About the Contributors
Contributors to the development and analysis of this survey include Renee Dye, a consultant in McKinsey's Atlanta office; and Olivier Sibony and Vincent Truong, a director and consultant, respectively, in the Paris office.
Eight business technology trends to watch
Eight business technology trends to watch
Eight emerging trends are transforming many markets and businesses. Executives should learn to shape the outcome rather than just react to it.
DECEMBER 2007 • James M. Manyika, Roger P. Roberts, and Kara L. Sprague
| In This Article Audio Download MP3 About the authors Letters to the editor |
Technology alone is rarely the key to unlocking economic value: companies create real wealth when they combine technology with new ways of doing business. Through our work and research, we have identified eight technology-enabled trends that will help shape businesses and the economy in coming years. These trends fall within three broad areas of business activity: managing relationships, managing capital and assets, and leveraging information in new ways.
Managing relationships
1. Distributing cocreation
The Internet and related technologies give companies radical new ways to harvest the talents of innovators working outside corporate boundaries. Today, in the high-technology, consumer product, and automotive sectors, among others, companies routinely involve customers, suppliers, small specialist businesses, and independent contractors in the creation of new products. Outsiders offer insights that help shape product development, but companies typically control the innovation process. Technology now allows companies to delegate substantial control to outsiders—cocreation—in essence by outsourcing innovation to business partners that work together in networks. By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.
Information goods such as software and editorial content are ripe for this kind of decentralized innovation; the Linux operating system, for example, was developed over the Internet by a network of specialists. But companies can also create physical goods in this way. Loncin, a leading Chinese motorcycle manufacturer, sets broad specifications for products and then lets its suppliers work with one another to design the components, make sure everything fits together, and reduce costs. In the past, Loncin didn't make extensive use of information technology to manage the supplier community—an approach reflecting business realities in China and in this specific industrial market. But recent advances in open-standards-based computing (for example, computer-aided-design programs that work well with other kinds of software) are making it easier to cocreate physical goods for more complex value chains in competitive markets.
If this approach to innovation becomes broadly accepted, the impact on companies and industries could be substantial. We estimate, for instance, that in the US economy alone roughly 12 percent of all labor activity could be transformed by more distributed and networked forms of innovation—from reducing the amount of legal and administrative activity that intellectual property involves to restructuring or eliminating some traditional R&D work.
Companies pursuing this trend will have less control over innovation and the intellectual property that goes with it, however. They will also have to compete for the attention and time of the best and most capable contributors.
Further reading:
Yochai Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom, Cambridge, MA: Yale University Press, 2006.
Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Boston: Harvard Business School Press, 2003.
James Surowiecki, The Wisdom of Crowds: Why the Many Are Smarter than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, New York: Doubleday, 2004.
Eric von Hippel, Democratizing Innovation, Cambridge, MA: MIT Press, 2005.
2. Using consumers as innovators
Consumers also cocreate with companies; the online encyclopedia Wikipedia, for instance, could be viewed as a service or product created by its distributed customers. But the differences between the way companies cocreate with partners, on the one hand, and with customers, on the other, are so marked that the consumer side is really a separate trend. These differences include the nature and range of the interactions, the economics of making them work, and the management challenges associated with them.
As the Internet has evolved—an evolution prompted in part by new Web 2.0 technologies—it has become a more widespread platform for interaction, communication, and activism. Consumers increasingly want to engage online with one another and with organizations of all kinds. Companies can tap this new mood of customer engagement for their economic benefit.
OhmyNews, for instance, is a popular South Korean online newspaper written by upwards of 60,000 contributing "citizen reporters." It has quickly become one of South Korea's most influential media outlets, with around 700,000 site visits a day. Another company that goes out of its way to engage customers, the online clothing store Threadless, asks people to submit new designs for T-shirts. Each week, hundreds of participants propose ideas and the community at large votes for its favorites. The top four to six designs are printed on shirts and sold in the store; the winners receive a combination of cash prizes and store credit. In September 2007 Threadless opened its first physical retail operation, in Chicago.
Companies that involve customers in design, testing, marketing (such as viral marketing), and the after-sales process get better insights into customer needs and behavior and may be able to cut the cost of acquiring customers, engender greater loyalty, and speed up development cycles. But a company open to allowing customers to help it innovate must ensure that it isn't unduly influenced by information gleaned from a vocal minority. It must also be wary of focusing on the immediate rather than longer-range needs of customers and be careful to avoid raising and then failing to meet their expectations.
Further reading:
C. K. Prahalad and Venkat Ramaswamy, The Future of Competition: Co-Creating Unique Value with Customers, Boston: Harvard Business School Press, 2004.
Don Tapscott and Anthony D. Williams, Wikinomics: How Mass Collaboration Changes Everything, New York: Portfolio Hardcover, 2006.
3. Tapping into a world of talent
As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence. Much as technology permits them to decentralize innovation through networks or customers, it also allows them to parcel out more work to specialists, free agents, and talent networks.
Top talent for a range of activities—from finance to marketing and IT to operations—can be found anywhere. The best person for a task may be a free agent in India or an employee of a small company in Italy rather than someone who works for a global business services provider. Software and Internet technologies are making it easier and less costly for companies to integrate and manage the work of an expanding number of outsiders, and this development opens up many contracting options for managers of corporate functions.
The implications of shifting more work to freelancers are interesting. For one thing, new talent-deployment models could emerge. TopCoder, a company that has created a network of software developers, may represent one such model. TopCoder gives organizations that want to have software developed for them access to its talent pool. Customers explain the kind of software they want and offer prizes to the developers who do the best job creating it—an approach that costs less than employing experienced engineers. Furthermore, changes in the nature of labor relationships could lead to new pricing models that would shift payment schemes from time and materials to compensation for results.
This trend should gather steam in sectors such as software, health care delivery, professional services, and real estate, where companies can easily segment work into discrete tasks for independent contractors and then reaggregate it. As companies move in this direction, they will need to understand the value of their human capital more fully and manage different classes of contributors accordingly. They will also have to build capabilities to engage talent globally or contract with talent aggregators that specialize in providing such services. Competitive advantage will shift to companies that can master the art of breaking down and recomposing tasks.
Further reading:
Richard Florida, The Rise of the Creative Class: And How It's Transforming Work, Leisure, Community, and Everyday Life, New York: Basic Books, 2004.
Daniel H. Pink, Free Agent Nation: How America's New Independent Workers Are Transforming the Way We Live, New York: Warner Books, 2001.
4. Extracting more value from interactions
Companies have been automating or offshoring an increasing proportion of their production and manufacturing (transformational) activities and their clerical or simple rule-based (transactional) activities. As a result, a growing proportion of the labor force in developed economies engages primarily in work that involves negotiations and conversations, knowledge, judgment, and ad hoc collaboration—tacit interactions, as we call them. By 2015 we expect employment in jobs primarily involving such interactions to account for about 44 percent of total US employment, up from 40 percent today. Europe and Japan will experience similar changes in the composition of their workforces.
The application of technology has reduced differences among the productivity of transformational and transactional employees, but huge inconsistencies persist in the productivity of high-value tacit ones. Improving it is more about increasing their effectiveness—for instance, by focusing them on interactions that create value and ensuring that they have the right information and context—than about efficiency. Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations—smarter and faster ways for individuals and teams to create value through interactions—that will be difficult for their rivals to replicate. Companies in sectors such as health care and banking are already moving down this road.
As companies improve the productivity of these workers, it will be necessary to couple investments in technologies with the right combination of incentives and organizational values to drive their adoption and use by employees. There is still substantial room for automating transactional activities, and the payoff can typically be realized much more quickly and measured much more clearly than the payoff from investments to make tacit work more effective. Creating the business case for investing in interactions will be challenging—but critical—for managers.
Further reading:
Bradford C. Johnson, James M. Manyika, and Lareina A. Yee, "The next revolution in interactions," mckinseyquarterly.com, November 2005.
Scott C. Beardsley, Bradford C. Johnson, and James M. Manyika, "Competitive advantage from better interactions," mckinseyquarterly.com, May 2006.
Thomas W. Malone, The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style, and Your Life, Boston: Harvard Business School Press, 2004.
Managing capital and assets
5. Expanding the frontiers of automation
Companies, governments, and other organizations have put in place systems to automate tasks and processes: forecasting and supply chain technologies; systems for enterprise resource planning, customer relationship management, and HR; product and customer databases; and Web sites. Now these systems are becoming interconnected through common standards for exchanging data and representing business processes in bits and bytes. What's more, this information can be combined in new ways to automate an increasing array of broader activities, from inventory management to customer service.
During the late 1990s FedEx and UPS linked data flowing through their internal tracking systems to the Internet—no trivial task at the time—to let customers track packages from their Web sites, with no human intervention required on the part of either company. By leveraging and linking systems to automate processes for answering inquiries from customers, both dramatically reduced the cost of serving them while increasing their satisfaction and loyalty. More recently, Carrefour, Metro, Wal-Mart Stores, and other large retailers have adopted (and asked suppliers to adopt) digital-tagging technologies, such as radio frequency identification (RFID), and integrated them with other supply chain systems in order to automate the supply chain and inventory management further. The rate of adoption to date disappoints the advocates of these technologies, but as the price of digital tags falls they could very well reduce the costs of managing distribution and increase revenues by helping companies to manage supply more effectively.
Companies still have substantial headroom to automate many repetitive tasks that aren't yet mediated by computers—particularly in sectors and regions where IT marches at a slower pace—and to interlink "islands of automation" and so give managers and customers the ability to do new things. Automation is a good investment if it not only lowers costs but also helps users to get what they want more quickly and easily, though it may not be a good idea if it gives them unpleasant experiences. The trick is to strike the right balance between raising margins and making customers happy.
Further reading:
John Hagel III, Out of the Box: Strategies for Achieving Profits Today and Growth Tomorrow through Web Services, Boston: Harvard Business School Press, 2002.
Claus Heinrich, RFID and Beyond: Growing Your Business with Real World Awareness, Indianapolis, IN: Wiley Publishing, 2005.
Jeanne W. Ross, Peter Weill, and David C. Robertson, Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, Boston: Harvard Business School Press, 2006.
6. Unbundling production from delivery
Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever-smaller increments cost effectively. Information and communications technologies handle the tracking and metering critical to the new models and make it possible to have effective allocation and capacity-planning systems.
Amazon.com, for example, has expanded its business model to let other retailers use its logistics and distribution services. It also gives independent software developers opportunities to buy processing power on its IT infrastructure so that they don't have to buy their own. Mobile virtual-network operators, another example of this trend, provide wireless services without investing in a network infrastructure. At the most basic level of unbundled production, 80 percent of all companies responding to a recent survey on Web trends say they are investing in Web services and related technologies. Although the applications vary, many are using these technologies to offer other companies—suppliers, customers, and other ecosystem participants—access to parts of their IT architectures through standard protocols.1
Unbundling works in the physical world too. Today you can buy fractional time on a jet, in a high-end sports car, or even for designer handbags. Unbundling is attractive from the supply side because it lets asset-intensive businesses—factories, warehouses, truck fleets, office buildings, data centers, networks, and so on—raise their utilization rates and therefore their returns on invested capital. On the demand side, unbundling offers access to resources and assets that might otherwise require a large fixed investment or significant scale to achieve competitive marginal costs. For companies and entrepreneurs seeking capacity (or variable additional capacity), unbundling makes it possible to gain access to assets quickly, to scale up businesses yet keep their balance sheets asset light, and to use attractive consumption and contracting models that are easier on their income statements.
Companies that make their assets available for internal and external use will need to manage conflicts if demand exceeds supply. A competitive advantage through scale may be hard to maintain when many players, large and small, have equal access to resources at low marginal costs.
Further reading:
"Jeff Bezos' risky bet," BusinessWeek, November 13, 2006.
Leveraging information in new ways
7. Putting more science into management
Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models. From "ideagoras" (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data.
Leading players are exploiting this information explosion with a diverse set of management techniques. Google fosters innovation through an internal market: employees submit ideas, and other employees decide if an idea is worth pursuing or if they would be willing to work on it full-time. Intel integrates a "prediction market" with regular short-term forecasting processes to build more accurate and less volatile estimates of demand. The cement manufacturer Cemex optimizes loads and routes by combining complex analytics with a wireless tracking and communications network for its trucks.
The amount of information and a manager's ability to use it have increased explosively not only for internal processes but also for the engagement of customers. The more a company knows about them, the better able it is to create offerings they want, to target them with messages that get a response, and to extract the value that an offering gives them. The holy grail of deep customer insight—more granular segmentation, low-cost experimentation, and mass customization—becomes increasingly accessible through technological innovations in data collection and processing and in manufacturing.
Examples are emerging across a wide range of industries. Amazon.com stands at the forefront of advanced customer segmentation. Its recommendation engine correlates the purchase histories of each individual customer with those of others who made similar purchases to come up with suggestions for things that he or she might buy. Although the jury is still out on the true value of recommendation engines, the techniques seem to be paying off: CleverSet, a pure-play recommendation-engine provider, claims that the 75 online retailers using the engine are averaging a 22 percent increase in revenue per visitor.2 Meanwhile, toll road operators are beginning to segment drivers and charge them differential prices based on static conditions (such as time of day) and dynamic ones (traffic). Technology is also dramatically bringing down the costs of experimentation and giving creative leaders opportunities to think like scientists by constructing and analyzing alternatives. The financial-services concern Capital One conducts hundreds of experiments daily to determine the appropriate mix of products it should direct to specific customer profiles. Similarly, Harrah's casinos mine customer data to target promotions and drive exemplary customer service.
Given the vast resources going into storing and processing information today, it's hard to believe that we are only at an early stage in this trend. Yet we are. The quality and quantity of information available to any business will continue to grow explosively as the costs of monitoring and managing processes fall.
Leaders should get out ahead of this trend to ensure that information makes organizations more rather than less effective. Information is often power; broadening access and increasing transparency will inevitably influence organizational politics and power structures. Environments that celebrate making choices on a factual basis must beware of analysis paralysis.
Further reading:
Thomas H. Davenport and Jeanne G. Harris, Competing on Analytics: The New Science of Winning, Boston: Harvard Business School Press, 2007.
John Riedl and Joseph Konstan with Eric Vrooman, Word of Mouse: The Marketing Power of Collaborative Filtering, New York: Warner Books, 2002.
Stefan H. Thomke, Experimentation Matters: Unlocking the Potential of New Technologies for Innovation, Boston: Harvard Business School Press, 2003.
David Weinberger, Everything Is Miscellaneous: The Power of the New Digital Disorder, New York: Times Books, 2007.
8. Making businesses from information
Accumulated pools of data captured in a number of systems within large organizations or pulled together from many points of origin on the Web are the raw material for new information-based business opportunities.
Frequent contributors to what economists call market imperfections include information asymmetries and the frequent inability of decision makers to get all the relevant data about new market opportunities, potential acquisitions, pricing differences among suppliers, and other business situations. These imperfections often allow middlemen and players with more and better information to extract higher rents by aggregating and creating businesses around it. The Internet has brought greater transparency to many markets, from airline tickets to stocks, but many other sectors need similar illumination. Real estate is one of them. In a sector where agencies have thrived by keeping buyers and sellers partly in the dark, new sites have popped up to shine "a light up into the dark reaches of the supply curve," as Rich Barton, the founder of Zillow (a portal for real-estate information), puts it. Barton, the former leader of the e-travel site Expedia, has been down this road before.
Moreover, the aggregation of data through the digitization of processes and activities may create by-products, or "exhaust data," that companies can exploit for profit. A retailer with digital cameras to prevent shoplifting, for example, could also analyze the shopping patterns and traffic flows of customers through its stores and use these insights to improve its layout or the placement of promotional displays. It might also sell the data to its vendors so that they could use real observations of consumer behavior to reshape their merchandising approaches.
Another kind of information business plays a pure aggregation and visualization role, scouring the Web to assemble data on particular topics. Many business-to-consumer shopping sites and business-to-business product directories operate in this fashion. But that sword can cut both ways; today's aggregators, for instance, may themselves be aggregated tomorrow. Companies relying on information-based market imperfections need to assess the impact of the new transparency levels that are continually opening up in today's information economy.
Further reading:
Hal R. Varian, Joseph Farrell, and Carl Shapiro, The Economics of Information Technology: An Introduction (Raffaele Mattioli Lectures), New York: Cambridge University Press, 2004.
Carl Shapiro and Hal R. Varian, Information Rules: A Strategic Guide to the Network Economy, Boston: Harvard Business School Press, 1999.
Conclusion
Creative leaders can use a broad spectrum of new, technology-enabled options to craft their strategies. These trends are best seen as emerging patterns that can be applied in a wide variety of businesses. Executives should reflect on which patterns may start to reshape their markets and industries next—and on whether they have opportunities to catalyze change and shape the outcome rather than merely react to it.
About the Authors
James Manyika is a director and Kara Sprague is a consultant in McKinsey's San Francisco office; Roger Roberts is a principal in the Silicon Valley office.
The authors wish to thank their McKinsey colleagues Jacques Bughin, Michael Chui, Tony Huie, Brad Johnson, Markus Löffler, and Suman Prasad for their substantial contributions to this article.
15.1.09
How to fix the innovation gap: A conversation with Judy Estrin
http://www.mckinseyquarterly.com/Strategy/Innovation/How_to_fix_the_innovation_gap_2285
How to fix the innovation gap: A conversation with Judy Estrin
The author and tech executive says we are living off the fruits of previous research and need to seed new ideas.
17.11.08
Motrin on web 2.0
http://www.crunchgear.com/2008/11/17/motrin-screws-up-in-tweet-land/
Merci/ thanks
________________________________________________________________
Jean-François Barsoum, MBA
Senior Managing Consultant & Practice Leader, Green + Innovation Strategies
ibm +1.514.964.4192 :: fax +1.845.491.2412 :: jbarsoum@ca.ibm.com
IBM Canada: Suite 400, 1360 boul. René-Lévesque Ouest, Montréal (QC) H3G 2W6
P Si possible, s.v.p. évitez d'imprimer ce courriel - please avoid printing this e-mail if possible
13.11.08
How Obama Will Use Web 2.0 For Change
How Obama Will Use Web 2.0 For Change
| Author CG Lynch CIO.com Sunday, November 09, 2008 |
During his campaign, President-elect Barack Obama delivered on the democratic promise of Web 2.0 technologies by using them to give voices to millions of Americans who had traditionally been drowned out by TV pundits, politicians and wealthy donors.
And he's already shown he'll continue to use them when he's in office. That was the contention made by speakers Friday morning on the third day of the Web 2.0 Summit here in San Francisco.
Three guest speakers included San Francisco Mayor Gavin Newsom, considered by many to be a candidate to run for governor in California. He was joined by Joe Trippi, the political advisor credited with harnessing the Web to build Vermont Governor Howard Dean's grassroots presidential campaign back in the 2004 democratic primary, and Arianna Huffington, founder and editor in chief of the Huffington Post (which publishes a lot of citizen journalism).
The group first reflected on the 2008 campaign. Trippi noted that innovations in the Web 2.0 space, particularly around social technologies and the proliferation of online video, allowed Obama to take internet-generated politicking to a whole new level than realized under Gov. Dean back in 2004, when mainly the fundraising abilities of the Web were realized.
"Back in 2003 and 2004, Facebook was just on a few college campuses," Trippi said. "All these new tools came in [since then] and changed everything."
As Trippi noted, Obama has carried Web 2.0 into his upcoming administration by launching Change.gov, a website that allows users (or citizens) to interact with their new president by weighing in on issues of importance to them. A user could click on "health care," for instance, where they'll be taken to a page where they can send their ideas to the new administration.
But while Obama raised an unprecedented amount of money on the Web, and many see Web 2.0 technologies as enabling his rise to power, it also left questions as to whether a gaffe can unfairly bring down a candidate in the public discourse.
Though verbal miscues for Obama were rare, during a fund raiser here in San Francisco, he was quoted by a citizen journalist writing for the Huffington Post that some people in small towns of Pennsylvania "get bitter...they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."
According to Mayor Newsom, such comments can beat down a politician due to the relentless way in which information travels the internet. As politicians become more aware of that fact, and there's less of line between on-the-record and off-the-record interactions with constituents, it can constrain what comments they might make.
"Everything you say is exposed," he said. "It's an extraordinary thing. Hopefully, we can be forgiven when we make mistakes."
But Huffington and Trippi countered Newsom by noting that Web 2.0 technologies such as blogs have a way of vetting information more thoroughly than the mainstream media, which will help candidates when false information gets stated about them.
"The internet has changed Karl Rove politics," Huffington said, which drew applause from the audience. "All the fear mongering, with Bill Ayers and calling Obama a socialist terrorist all got proven wrong [on the Web]," she said.
Despite Obama's success in harnessing Web 2.0 technologies during his campaign, and using it to gather input from citizens with change.gov, Newsom said much more work needs to be done to bridge the digital divide in America.
"There are people near here that have no idea about what we are discussing," Newsom said. "They don't have internet in their homes. We have a huge digital divide, for the people who really need this[Web 2.0 technology] the most. The only media these folks are getting is the TV set."
24.9.08
11.9.08
Design for Frugal Growth
Many thanks to Norbert!
Design for Frugal Growth
by Jaya Pandrangi, Steffen Lauster, and Gary L. Neilson
Cleveland, September 10, 2008 -- With the right kind of organizational design, you can expand while cutting costs. Five elements are critical: accountable business units, an aptitude for innovation, pull-based functional relationships, differentiated capabilities, and the ability to leverage scale.
To read the full Resilience Report:
http://www.strategy-business.com/resilience/rr00062
Design for Frugal Growth
by Jaya Pandrangi, Steffen Lauster, and Gary L. Neilson
9/10/08
With the right kind of organization, you can expand while cutting costs.
| Illustration by Dave Plunkert |
The control of costs had been its greatest strength. But it was now the greatest weakness. The company had spent so many years trying to reduce expenses that this imperative was hardwired into its practices, processes, and organizational design. When executives tried to shift gears, to expand into new markets and introduce new products, those old ways of doing business also had to change.
That was the story of the Amberville Corporation, a major U.S. brand-name consumer packaged goods (CPG) manufacturer. (This company is fictional, a composite of three companies; although all three have been disguised, the details are based on in-depth observation and are typical of many companies in the industry.) Like many other consumer products companies, Amberville had once been an avid innovator, responsible for many new household-name products. But its priorities had swung, like a pendulum, from growth in the 1980s to cost cutting in the 1990s. Now, in 2006, the pendulum was swinging back to growth.
But the company was ill-equipped for the transition. To keep costs down and control its large and far-flung product line, Amberville had built up a vast central operation at headquarters. New product launches had to be approved at four different levels: brand, division, region, and headquarters. Senior executives in functional areas were expected to weigh in at least twice during the development cycle on such issues as capital costs and feasibility. Managing the computer systems and functions to support dozens of brand-based and regional operations groups was an immense task involving hundreds of people and a major focus on HR systems, reporting relationships, and recruiting programs.
Meanwhile, consumers were growing increasingly sophisticated. They wanted more information about Amberville's products. So did institutional customers, such as schools and restaurant chains. Some Amberville marketers saw the opportunity to build Web sites and use other online channels to connect directly with consumers. But these efforts faltered amid the sheer complexity of multiple product categories. And their failure led many people in the company to conclude that even the business units that were closest to Amberville customers had lost their market focus and speed.
There was other evidence that all was not well. For example, when the company expanded its branded line of ice cream, the unit was consistently slower than competitors in launching new flavors. Business unit leaders spent much of their time looking inward, negotiating with the executives at headquarters who made the final decisions about personnel, product launch timelines, and many other operational issues.
Amberville's dilemma is typical of many consumer packaged goods companies in North America and Europe today. Their most familiar home markets are stagnant; for the past 20 years, consumption of consumer goods in most product categories has grown only at the rate of population growth plus inflation. And consumer behavior is fragmenting; supermarket shoppers are increasingly likely to switch stores and brands. At the same time, mergers and acquisitions among manufacturers have consolidated the industry, creating larger competitors with global reach. But new consumers in emerging nations — those in Asia, Latin America, eastern Europe, and the Middle East — are eager for products. Simultaneously, around the world, global retail chains like Tesco and Wal-Mart are applying their expertise at squeezing manufacturers' margins.
As consumer packaged goods companies have struggled to create and execute growth strategies, investor expectations for the sector have remained high, and raiders continue to stalk the producers of popular brands. It's no wonder that the industry has devoted its attention, for at least a generation, to reducing cost, streamlining operations and creating economies of scale by consolidating research, manufacturing, and distribution. This approach has paid off in the past; most CPG companies have survived. But now, having turned themselves, in effect, into supercharged cost-cutting machines, how can these companies suddenly invest in the risky arenas of emerging markets and fundamental innovation? And if they can't, how will they compete when frugality alone is no longer sufficient?
Although the choice between growth and frugality is passionately debated in many companies, it represents a false dichotomy. Growth and cost efficiency should reinforce each other. Logically, cost efficiencies should make it easier to devote more resources to growth, and the launch of new products and services should lead to innovations in efficiency. Why don't things work that way in practice? Often because of organizational designs that, consciously or not, were put in place during the years of cost cutting. A CPG company, in particular, cannot move forward unless its leaders can diagnose and fix the barriers to growth that have gradually become a fixture of their enterprise.
The Limits of Good Intentions
When leaders in the sector begin a growth initiative, they often start by declaring a commitment to the new strategy, enlisting employee hearts and minds, and assuming that some kind of cultural and behavioral transformation is needed. But they overlook the organizational design, which actually drives behaviors and indirectly determines whether the rest of the growth strategy can be executed correctly.
For example, in many large organizations, the way the incentives are set up frequently clashes with the growth strategy. The corporate leaders promote bold and big innovations. But they leave in place the target demanding that all new products show a profit within two years or face being shut down. This creates almost irresistible incentives for business unit leaders to provide "work-arounds" that make them appear to generate the requisite profits, at least in the short run. They might bury costs in the most successful product lines or manipulate shipping times so that the numbers will look more favorable.
At Amberville, the core demanded a major new commitment to customer service from the business units, and they all complied — but in a halfhearted way that faded from view within six months. It would be easy to say that the local business unit leaders were resistant to change, but the truth was much more complicated. These leaders saw the value of customer service, but they had neither control nor influence over the customer service process, they lacked easy and regular communication with the leaders of that function, and their incentives favored other priorities. It was much easier to focus on other ways to deliver the results against which they would be measured. All the goodwill and strategic understanding in the world could not overcome those organizational disabilities.
The leaders at Amberville did, however, ultimately change their behavior, and not just superficially. They revamped the organization in ways that dramatically increased revenues without increasing investment. We have seen the same sorts of results firsthand in several other consumer products manufacturers in recent years. One independent condiment company, after redesigning itself, doubled its value in less than five years. All of these manufacturers have initiated significant changes in their day-to-day practice through a shift in their organizational design — specifically, by setting in place five critical enablers of accountable, innovative, autonomous, and linked behavior. (See Exhibit 1.)
The list of enablers in the growth triangle will not be a surprise to many managerial veterans. These factors are known for their impact on growth in a variety of industries. Who could argue with having truly accountable business units, a genuine capacity for customer-focused innovation, functions that successfully serve the needs of the frontline business units, capabilities that meet the needs of a differentiated customer base, or the ability to take practices and products to scale around the world? But companies often struggle to achieve these enablers, and sometimes give up trying. With a substantial shift in organizational design, the behaviors and practices of frugal growth naturally follow.
Accountable Business Units
Just before its redesign, Amberville had 25 global divisions, all located in the company's headquarters in the United States. Over the course of the following year, they were reconfigured into 64 market-facing business units — some devoted to regions such as southeast Asia, others to product brands in categories such as ice cream and chewing gum. Quadrupling the number of Amberville's business units also meant quadrupling the number of business leaders, and giving each responsibility for his or her operations.
Businesspeople often talk about "owning" their assignment, but it's not always clear what that means. At Amberville, "ownership" meant taking on a dramatically increased level of accountability. The managers of business units now defined their market, operations, and strategic space to decide how they would deliver superior growth. Business units were granted greater control over the cross-functional resources assigned to them, including the sales and customer service staff. Business unit managers could deploy these resources flexibly on the basis of shifts in market needs. Information technology staff were assigned to work with each business unit to help it obtain faster, more complete access to market and customer data.
Before the reorganization, the P&L-based budgets for marketing, R&D, sales, and other functions had been set by the core, and the business units had to operate within these limits. For example, if a business unit had received US$100 million for its R&D budget, that was the limit of its innovation spending. Now, each business unit leader had a top-line revenue and a bottom-line profit target. All the funds in between could be deployed as needed. If one product's strategy depended heavily on innovation, the business unit leader could invest $150 million in R&D, taking the money from other functions. Meanwhile, a business unit whose strategy was based on operational excellence might cut back on R&D and invest instead in production skills.
Amberville's core was now treating the business units the same way a heavily involved private equity investor might treat its favored companies. The business unit leaders rapidly learned firsthand what it was like to be an entrepreneur. They defined their strategy, they executed it, and they reaped personal rewards if they succeeded and suffered personal consequences if they failed to deliver their targets. Their own money wasn't at risk, but their career advancement was, and they had fewer institutional means of masking poor performance. Business unit leaders came to think of their new system as "autonomy with boundaries": They could accomplish much more on their own, but their limits and reporting responsibilities were clearer and less ambiguous than they had been before.
Meanwhile, the jobs of the division heads and core leaders shifted from operational involvement to guidance. They could approve requests for funds, help develop investment plans, give advice on the hiring of key players, and assist with customer relationship development. They did not have the authority to create strategies or manage operations, but their own careers were closely dependent on the success of the more junior business unit leaders. "It's like being a football coach," said one core leader. "You're not directly playing, but you're still responsible for the business. If your team loses three years in a row, you'll still get fired."
Amberville's experience is typical. When business units — whether organized by geographic region or product and service category — are accountable for their strategy and operations, they deliver superior growth. They can execute their plans far more quickly, without having to wait for approval and second-guessing the internal politics of the core. They have more to gain from delivering results, and no place to hide when performance falls short. Decision rights go to those who have the closest understanding of consumers and the external market. Because accountable business unit leaders pay close attention to business practices, the learning curve of the entire operation accelerates. Indeed, the business unit becomes more skilled at reducing overhead than ever before, because its leaders know that they can rapidly apply their cost savings to profitable investments as they see fit. So much for cost and growth consciousness being at odds.
Providing this type of virtual entrepreneurship to business units requires several organizational shifts. The local line leaders need the authority to make decisions, the capabilities to take consumer information into account, and a sustained trust that the core will not block progress and will appreciate results. The IT and information-management systems are consciously designed to deliver the right information to the right parts of the organization at the right time. For example, extensive day-to-day data stays in the business unit; if it reached the corporate core, that would be an invitation to micromanage. But quarterly reports to the core include more detail than in the past, so that division heads and business unit leaders can talk about long-range patterns in customer response or costs.
One powerful means of creating autonomy with boundaries is the "CEO contract": an agreement with the business unit leaders that specifies top- and bottom-line targets, along with the rewards (including personal bonuses) for achieving those targets and the penalties for missing them. The Amberville CEO contract was a very informal document, with three critical features. First, every business unit leader got one. Second, each contract was specifically designed for its business unit, spelling out particular goals for revenues, profit, and two or three other numerical metrics. Third, the contract specified the qualitative metrics that encouraged teaming across the organization.
This last feature of the CEO contract helped mitigate one unfortunate tendency of accountable business units: their natural disinclination to share ideas, knowledge, or resources with the rest of the company. For example, shared advertising expenses, particularly for major marketing events, had long been a bone of contention. Every business unit was expected to pay a share, but some divisions benefited far more than others. Now, thanks to the contract, it was made clear: There would be only a limited number of shared ad campaigns, but each division would contribute.
The contract also established a few minimum standards and policies that protected the corporation, such as employee safety practices. For example, many factories in emerging nations do not require people to wear safety goggles on the shop floor, but Amberville factories always did, because the performance contract insisted on it. In other respects — for example, in the details of plant construction and the design of the assembly line — the local business unit maintained control.
Aptitude for Innovation
In consumer products, the most profitable innovations vary widely by category. In food, for example, rapid introduction of new flavors can be critical. There are also opportunities for breakthrough innovation, as Groupe Danone discovered with its Activia yogurt line, which contains live bacteria with a claim of aiding digestion. More opportunities for breakthrough innovation exist in personal and home care, as Procter & Gamble Company has shown with products including the Swiffer mop and antiwrinkle creams. (See "P&G's Innovation Culture," by A.G. Lafley, s+b, Autumn 2008.)
But the most critical factor is the connection of innovation to consumer insight. The most effective way to facilitate this connection is with a change in the organizational relationship between the business units and the corporate core. The corporate core should be funded to conduct longer-range research that business units would not undertake (for example, the kind of fundamental research in biotics that led to the launch of Activia). Individual business units should develop the product extensions and process innovations that they need to stay close to their consumer markets. And some internal market-style mechanism should allow successful innovations to be quickly shared across the enterprise.
At Amberville, the R&D staff at the corporate core had traditionally worked on three- to five-year projects that they had proposed themselves. Business unit leaders had usually reacted by saying, in effect, "This has nothing to do with what we are trying to do." Now, as part of the redesign, Amberville created an internal R&D market where innovation leaders sought buyers for their ideas. If they could not interest a business unit leader, they were free to take the idea outside the company.
Pull-based Functional Relationships
One aspect of organizational design that inhibits growth is the relationship between business units and functions. Although functions often operate in all three components of the organization — the core, the business units, and the infrastructure all have information technology, human resources, and finance staffs — the highest leverage lies in the relationship between business units and the infrastructure.
The way to increase the value of support services is through pull-based functional relationships. The business units pull services from the infrastructure, specifying their requirements and sometimes codesigning them, instead of having the services pushed on them in a company-wide package.
Pull-based functional relationships have existed for years. Many businesspeople still find the idea discomfiting; it means giving internal functions the autonomy to behave like a third-party provider. But a well-designed pull-based functional relationship becomes like the relationship between a loyal customer and a regular supplier. The supplier (the functional infrastructure team) cares about the customer's opinion; the customer (the business unit leader) treats the functional staff as he or she would treat any favored external supplier, not like an internal team forced to jump through hoops. This level of mutual respect, when it occurs, is a far cry from the unfortunate dynamic in many companies, in which the business unit leaders and the functional infrastructure team tend to see each other as adversaries.
How can a company enable this type of relationship? One approach is to employ the same kind of service-level agreement (SLA) that companies use for shared services and outsourcing vendors. The trick is setting up the SLA internally and making it simple but effective. This contract establishes the types of services to be delivered, the internal cost of providing them (which can increase as the service improves), and the requirements for each side. At Amberville, SLAs are now required for all functional services, including logistics, finance, and IT. Any functional team, reporting through the infrastructure chain of command, effectively has a pool of 64 customers — the business units — and an incentive to learn from its services to each of them.
Differentiated Capabilities
No organization can be best at everything. The capabilities of a company are limited by the resources available, the skills of its population, the evolution of its existing infrastructure, and its experience. Choices must be made at the corporate core about the capabilities in which the organization will invest and the support to give them. The most important capabilities to invest in are those that distinguish a company from its competitors — or, as Alexander Kandybin and Surbhee Grover put it, those that can't be copied. (See "The Unique Advantage," s+b, Autumn 2008.)
One well-known example of a differentiated advantage is the "hot-fill" capability that PepsiCo Inc. gained in 2001 when it merged with the Quaker Oats Company (and thus acquired the Gatorade brand). Hot-fill technology, used to bottle beverages such as juices and vitamin drinks without the need for preservatives, had previously been limited to relatively small brands such as Snapple (which had invented it); now Pepsi rolled out the technology in its Tropicana brand and in a new joint venture in bottled teas with Lipton, which was the first offering of its kind and which has since enjoyed an advantage over competitors.
A portfolio of capabilities is built primarily at the corporate core, because it involves significant long-term investment. (As with Pepsi, it may also involve acquisition.) The first step is a systematic evaluation of the "leverageable" assets of the company, those distinctive capabilities that determine what types of growth might be supported. Capabilities can be found in a wide range of functions, such as supply chain, manufacturing, product development, consumer insight, marketing, brand management, and customer management. Business units may be invited to collaborate in this assessment, making the case for the capabilities that they find most useful in the market. But ultimately, the corporate core makes these choices and investments.
The difficulty of this task and the critical role of the core executive team are often underestimated. Not every capability is a candidate for the core portfolio; some contribute strongly to growth while others lag. Corporate leaders must place bets on which business units will be most adept at using, learning from, and developing the company's distinctive skills and technologies. These business units need aggressive funding; others should be more consciously managed for the bottom line, with a short-term focus on innovation.
Ability to Leverage Scale
As consumer products companies meet global demand, they bring capabilities along. Products and brands must be customized for new markets. A wide variety of retailers must be engaged as customers. And old practices must be adapted to new cultures and locales.
Leveraging of knowledge and capabilities on this global scale requires direct networking among business units, removing the bottleneck at the corporate core. Because Amberville had never built up those sorts of contacts, its leaders studied companies, like Johnson & Johnson, that had a good track record. J&J moves people among its business units frequently, encouraging employees to maintain their presence in informal networks with their former coworkers.
Amberville is now finding its own ways to foster global networking. For example, its Middle East business unit leads research and development in the frozen-drinks category, because several frozen-drink researchers are located there; the rest of the regions adapt the flavors that come out of their work.
Management fashion is full of stark choices: Centralize or decentralize? Global or local? Cost or growth? There's a long-standing proverb in the system dynamics field: "You can have everything you want, but not all at once." In the 1990s, many consumer products companies decided that they would give up growth in order to have the security of lower expenses. Now they are riding the pendulum back to growth. But in the end, those who succeed in growing their company will do so with all their frugality intact. With an organization design in place that balances the roles of the core, the business units, and the functional infrastructure, they should be able to have it all.
Author Profiles:
Jaya Pandrangi is a principal with Booz & Company in Cleveland. Her work focuses on strategy as well as sales and marketing effectiveness for consumer products companies.
Steffen Lauster is a partner with Booz & Company in Cleveland who focuses on strategy development and revenue management initiatives for consumer products clients in the U.S. and Europe.
Gary L. Neilson is a senior partner with Booz & Company in Chicago. He helps companies diagnose and solve problems associated with strategy implementation, organizational effectiveness, and efficiency.
Also contributing to this article was Booz & Company Partner Leslie Moeller.
10.12.07
The Many Errors in Thinking About Mistakes: When things go wrong, as they inevitably do, we focus on flagellating ourselves, blaming someone else or covering it up. Or we rationalize it by saying others make even more mistakes.What we do not want to do, most of the time, is learn from the experience.
November 24, 2007
Shortcuts
The Many Errors in Thinking About Mistakes
By ALINA TUGEND
OF the many mistakes I have no doubt made over the last few weeks, two stand out: One cost me money and one cost me some pride.
I made an error in an article, and of the thousands who read it, a few gleefully e-mailed me about it.
I corrected it, although I sheepishly admit my first — though fleeting — instinct was to avoid owning up.
In the second case, in a flurry of zealous organization, I sent in a check to cover a bill for my husband's monthly train pass. It turns out that he pays by direct debit. I canceled the check.
Then we got a notice that we were being charged $20 for a bounced check.
Neither mistake was on the scale, with, say, amputating the wrong leg or causing two planes to collide.
But they bothered me and made me consider how we are taught to think of mistakes in our society.
"I think it's a very difficult subject," said Paul J. H. Schoemaker, chairman of Decision Strategies International and teaches marketing at the Wharton School of the University of Pennsylvania. "There's a lot of ambivalence around making mistakes."
On one hand, as children we're taught that everyone makes mistakes and that the great thinkers and inventors embraced them. Thomas Edison's famous quote is often inscribed in schools and children's museums: "I have not failed. I have just found ten thousand ways that won't work."
On the other hand, good grades are usually a reward for doing things right, not making errors. Compliments are given for having the correct answer and, in fact, the wrong one may elicit scorn from classmates.
We grow up with a mixed message: making mistakes is a necessary learning tool, but we should avoid them.
Carol S. Dweck, a psychology professor at Stanford University, has studied this and related issues for decades.
"Studies with children and adults show that a large percentage cannot tolerate mistakes or setbacks," she said. In particular, those who believe that intelligence is fixed and cannot change tend to avoid taking chances that may lead to errors.
Often parents and teachers unwittingly encourage this mind-set by praising children for being smart rather than for trying hard or struggling with the process.
For example, in a study that Professor Dweck and her researchers did with 400 fifth graders, half were randomly praised as being "really smart" for doing well on a test; the others were praised for their effort.
Then they were given two tasks to choose from: an easy one that they would learn little from but do well, or a more challenging one that might be more interesting but induce more mistakes.
The majority of those praised for being smart chose the simple task, while 90 percent of those commended for trying hard selected the more difficult one.
The difference was surprising, Professor Dweck said, especially because it came from one sentence of praise.
They were then given another test, above their grade level, on which many performed poorly. Afterward, they were asked to write anonymously about their experience to another school and report their scores. Thirty-seven percent of those who were told they were smart lied about their scores, while only 13 percent of the other group did.
"One thing I've learned is that kids are exquisitely attuned to the real message, and the real message is, 'Be smart,'" Professor Dweck said. "It's not, 'We love it when you struggle, or when you learn and make mistakes.'"
As we get older, many of us invest a great deal in being right. When things go wrong, as they inevitably do, we focus on flagellating ourselves, blaming someone else or covering it up. Or we rationalize it by saying others make even more mistakes.
What we do not want to do, most of the time, is learn from the experience.
Professor Dweck, who wrote a book on the subject called "Mindset" (Random House, 2006), proved this point in another study, this one of college students. They were divided into two camps: those who did readings about how intelligence is fixed, and those who learned that intelligence could grow and develop if you worked at it.
The students then took a very tough test on which most did badly. They were given the option of bolstering their self-esteem in two ways: looking at scores and strategies of those who did worse or those who did better.
Those in the fixed mind-set chose to compare themselves with students who had performed worse, as opposed to those Professor Dweck refers to as in "the growth mind-set," who more frequently chose to learn by looking at those who had performed better.
Mr. Schoemaker would agree. He was the co-author of a June 2006 article for the Harvard Business Review called "The Wisdom of Deliberate Mistakes." Among its theories is that there is too much focus on outcome rather than on process.
If businesses and people are not making a certain number of mistakes, "they're playing it too safe," he said.
The resistance to making mistakes runs deep, he writes, but it is necessary for the following reasons, which he outlined in the article:
¶We are overconfident. "Inexperienced managers make many mistakes and learn from them. Experienced managers may become so good at the game they're used to playing that they no longer see ways to improve significantly. They may need to make deliberate mistakes to test the limits of their knowledge."
¶We are risk-averse because "our personal and professional pride is tied up in being right. Employees are rewarded for good decisions and penalized for failures, so they spend a great deal of time and energy trying not to make mistakes."
¶We tend to favor data that confirms our beliefs.
¶We assume feedback is reliable, although in reality it is often lacking or misleading. We don't often look outside tested channels.
Of course, there are mistakes and then there are mistakes.
"With children, you want them to make mistakes, but not end up in prison or in a wheelchair," Mr. Schoemaker said. One also has to weigh the consequences. We want people who run nuclear power plants or fly planes to avoid mistakes as much as possible.
But most of us are not holding people's lives in our hands and can stand to take a few more chances.
"Unfortunately, the people who most need to make mistakes are the ones least likely to admit it, and the same is true of companies," Mr. Schoemaker wrote.
Of course, there are stupid mistakes, or what Stanley M. Gully, associate professor at the School of Management and Labor Relations at Rutgers University, called "unintelligent failures."
After all, nobody wants a worker who keeps making the same mistake, and "if we fail and don't learn from it, it's not an intelligent failure," he said.
Professor Gully and other researchers have looked at ways of training people to do complex tasks and found that in some cases encouraging them to make mistakes works better than teaching them to avoid them.
Those who were good at processing information, open to learning and not overly conscientious were more effectively trained if they were persuaded to make mistakes.
"We get fixated on achievement," he said, but, "everyone is talking about the need to innovate. If you already know the answer, it's not learning. In most personal and business contexts, if you avoid the error, you avoid the learning process."
But old habits die hard. I want to be more open to — or less afraid of — making mistakes. But if you catch an error in this column, do me a favor. Keep it to yourself.
E-mail: shortcuts@nytimes.com
30.10.07
31.7.07
In a complex world, innovation happens from the top down: Many of the most popular new products, like the iPod, are dominated by a top-down elitist innovation model that does not allow for customization.
In a complex world, innovation happens from the top down
By G. Pascal Zachary
Monday, July 30, 2007
NEW YORK: User-generated content - from Wikipedia to YouTube to open-source software - is generating waves of excitement. But the opening of innovation to wider numbers of people obscures another trend: Many of the most popular new products, like the iPod, are dominated by a top-down elitist innovation model that does not allow for customization.
"New technologies are becoming so complex that many are beyond the possibility of democracy playing a role in their development," said Thomas Hughes, a science and technology professor at the University of Pennsylvania.
Consider: electronic implants into human bodies; gene-splicing as common as cosmetic surgery; computer networks mining vast databases to discern consumer preferences. All of these innovations are the result of corporate or government initiatives overseen by the elite.
"The process of innovation leaves out a huge proportion of the population," said Daniel Sarewitz, director of the Consortium for Science, Policy and Outcomes at Arizona State University.
Experts like Eric von Hippel, a professor at the Massachusetts Institute of Technology, argue that the proliferation of "user-generated" designs signals the "democratizing" of innovation. Armed with inexpensive digital tools and networks, ordinary people, he says, can band together to push their own innovations. They also can hijack existing technologies, taking them in directions only dimly envisioned by the original creators.
One example is an electronic community called Instructables, whose participants share methods for customizing standard products in unpredictable ways. The chief of Instructables, Eric Wilhelm, who earned his doctorate at MIT, where he was inspired by Eric von Hippel, has posted a clever means of turning a white Asics Gel-Foundation 7 running shoe into a purple model. (The $90 official version comes only in a white-black-and-blue combination.)
Today, Web-savvy consumers "expect innovations to meet their needs," Wilhelm said. "If innovation isn't tailored to them, they expect to be able to tailor it to themselves. That is a big change."
But does this really mean that the elite no longer sits at the top of the innovation food chain?
"Elites have a lot of leverage but less than they used to," says Peter Leyden, director of the New Politics Institute in San Francisco. "More people are getting their voices heard."
Leyden sees an emergent American "republic of innovation," in which growing numbers of people influence what innovations are made and when.
Skeptics, however, say that the rosy scenario is exaggerated and that user-generated innovation is merely a kind of "democracy lite," emphasizing high-end consumer products and services rather than innovations that broadly benefit society.
"Difficult questions are going unasked about who is participating in innovation and on what terms," said James Wilsdon, director of the innovation program at Demos, a policy research group in London.
In that scenario, needed innovations can be overlooked. For example, huge amounts of money are spent on improving Internet search engines or MP3 players, while scant attention is given to alternative energy sources. Battling diseases like AIDS or Alzheimer's - efforts that lobbying groups in wealthy countries help to highlight - attract legions of well-financed innovators, while big global killers, like childhood diarrhea and sleeping sickness, are virtually ignored.
Popular pressure to pursue certain innovations sometimes gets results, of course. In 2004, voters in California passed a law to provide funding to a stem-cell research institute - in a rebuke to the administration of President George W. Bush, which has banned federal funding for such research.
"This was a great example of a democratic adjudication of an innovation issue," said Sarewitz, of Arizona State. Even so, bureaucratic and legal delays have meant a slow start for the San Francisco lab, which has not yet received approval to spend any of the $3 billion in promised taxpayer funds.
For all the hoopla over the power and promise of user-generated content, consumer-directed design and other hallmarks of our new golden era of democratized innovation, one of the iconic products of our times - the iPod - can't be customized (no, I'm not counting putting on different-colored protective jackets). There is an unbroken line between Henry Ford (with his Model T) and Steve Jobs. The new iPhone similarly reflects the elite, corporate innovator's drive to find one size that fits many.
The cliché that committees can't create great ideas, or art, still seems to be true - though whether or not that is the best way to innovate remains an open question. Who knows how much longer?
G. Pascal Zachary teaches journalism at Stanford University and writes about technology and economic development.
8.5.07
IBM Executive Calls for "Virtual Planet"
IBM Executive Calls for "Virtual Planet"
Comments
May 02, 2007 — IDG News Service (Boston Bureau) — As companies look to engage in more virtual business interactions, IBM's head of innovation called for more integration between the various online virtual worlds where avatars meet.
Nick Donofrio, executive vice president of innovation and technology at IBM, hopes to encourage the creation of what he termed "a virtual planet" where rival virtual worlds are more interlinked.
"We want to bring all the worlds together in some way," he said Wednesday during his keynote address at IBM's PartnerWorld conference in St. Louis. "Wouldn't that be a blow for freedom?" he added.
IBM will help work to make it possible for a user in one virtual world to take the assets he creates in that environment and move them to other worlds, according to Donofrio.
While Linden Research's Second Life is the most popular virtual world, there are alternatives such as Active Worlds and There.
IBM is encouraging its business partners to take more advantage of virtual meetings and training and has set up a special PartnerWorld island in Second Life. Partners can use virtual rooms on the island to meet up with each other and can opt to make those meetings private, according to Ravi Marwaha, general manager, global business partners at IBM. The vendor plans to make more of its Second Life space available to its partners so they can host their own virtual events, he said.
The creation and promotion of a 3-D Internet was one of the 10 potential business opportunities IBM unearthed last year, Donofrio said.
The vendor conducted two 72-hour brainstorming sessions, which it dubbed InnovationJam, involving its staff, partners, customers and academic institutions. More than 150,000 people participated and submitted more than 46,000 ideas at the events held in July and September. Donofrio had the task of whittling those ideas down to 10 suggested directions. IBM committed to invest US$100 million in those 10 ideas over a two-year period.
IBM conducted a similar push for ideas specifically from its partner community back in 2004 and is keen to elicit more feedback around how better to serve the needs of its small to midsize business customers, Marwaha said. To help process the ideas, IBM plans to open its ThinkPlace ideas forum to its partners, he added. IBM launched ThinkPlace nearly two years ago as a central online resource to gather ideas.
Other stories by China Martens
Copyright 2006 IDG News Service, International Data Group Inc. All rights reserved.
23.2.07
Full speed ahead for intelligent car design
Full speed ahead for intelligent car design
Financial Times, 20 February 2007 - A planned 'active safety' system in US cars promises to cut congestion, but drivers may be reluctant to take it up. A decade or so down the road from now, if all goes to plan, driving in the US will be a smoother, less adrenaline-rich experience.
Your car will be wired to avoid colliding with other cars or swerving off the road, sometimes by steering, decelerating or braking automatically. Motorways will bristle with wireless equipment that can beam you messages, charge tolls without stopping, or pre-empt traffic lights for emergency vehicles. Your car will also send information on traffic or weather conditions to central agencies in an effort to prevent delays and dangerous pile-ups.
This super-safe roadway of the future is approaching thanks to a joint push by government and business. In the US, the world's largest car market, Ford, General Motors and DaimlerChrysler, along with Japan's Toyota, Nissan and Honda and Germany's Volkswagen and BMW, have formed a consortium to establish standards and protocols for equipment.
The industry has joined with the US federal and state transportation departments and professional associations in the Vehicle Infrastructure Integration (VII) Consortium, as the technology is called, which is being tried at test beds in Michigan and California.
America's Federal Communications Commission has set aside 75 MHz of communications spectrum for it, and Japan and the European Union are also studying VII.
"The vision is a nationwide communications network that includes roads, intersections and vehicles," says David Henry, of DaimlerChrysler.
Road crashes in the US alone kill about 42,000 people a year and cost the economy $230bn (£118bn), according to the state of Michigan. Accident rates have dropped recently with improvements in standard safety equipment, but the trend line is flattening due to the constant factor of human error. With "passive safety" devices such as airbags and seatbelts now widely used, safety experts say "active safety" is the new frontier. The technology could also cut fuel consumption and CO2 emissions by reducing traffic congestion.
While car companies and regulators agree the technology is coming, some barriers stand in the way. Carmakers may have agreed on the need for standardised roadside infrastructure and compatible transceivers and processors, but will US motorists embrace the technology? A universal safety and traffic-management system that wires cars to each other and terrestrial infrastructure will raise privacy and civil liberty issues.
And lawyers and carmakers have barely begun to explore the legal liability implications if cars make snap decisions for drivers.
Such concerns are not stopping the eight carmakers forging ahead with tests. On a recent afternoon near Ford Motor's headquarters in Dearborn, Michigan, Joe Stinnett, a product design engineer, heads on to the motorway to demonstrate an experimental Global Positioning System (GPS)-based device that allows motorists to "see" vehicles brake suddenly, even if the leading vehicle is several cars away or on a curve.
A processing box mounted in the Volvo allows Mr Stinnett's car to "paint" the curve of the road ahead and brake safely when a Jaguar, equipped with its own device, suddenly brakes (Ford owns the Volvo and Jaguar brands). The Volvo's driver is warned with an emergency light, but over time the technology is expected to evolve into "autonomous braking".
Carmakers are focusing most of their experiments on lane departures and intersection collisions, since they account for about 80 per cent of accidents. Also being tested are systems that will warn drivers when they are approaching a bend too fast.
Wireless infrastructure at the roadside will allow for "open-road tolling", warnings about speed limits or construction or school zones. It will also allow advertising – a potential irritant to motorists, which VII advocates argue could help pay for the equipment, US-wide, will cost an estimated $4bn to $6bn. The infrastructure can also be used to balance traffic merging from multiple roadways.
Ford is also researching driver drowsiness and the distractions posed by mobile phone use. In a possible sign of cars to come, the 2007 model of Volvo's S80 saloon car is wired to examine how well someone is driving – based on acceleration, steering and other patterns – before "deciding" whether to forward or divert an incoming phone call (see below).
Another area is collection of data from vehicles. A critical mass of cars turning on their windshield wipers at once, or detecting icy road conditions through sensors in their tyres, might beam the information to trafficcontrol centres that can warn other motorists. "There are hundreds or thousands of applications you could do," says Suzanne Murtha, head of vehicle safety systems with ITS of America. "It's limited to the collective imagination."
However, it is far from certain that the American public will share the safety advocates' enthusiasm for the technology. "American carbuyers traditionally will not buy safety equipment," admits Greg Krueger of the Michigan Department of Transportation. While the typical American driver might spend lavishly on stereo equipment, for example, anti-lock brakes were not common in the US until they became legally required about a decade ago. Techno-Com Wireless, a telematics company involved in wireless location technology estimates that the transceiver for VII will cost less than $100 per vehicle, not including related applications. But economy-minded buyers of small cars in particular may balk at the added cost. That could force carmakers to absorb it at a time when they already face intense pressure from high raw material and other costs.
The potential privacy and legal complications surrounding technology that could allow law enforcement officials or outside hackers to track cars also remain relatively unexplored. Americans have fought hard against milder incursions on their privacy.
Members of the VII Consortium met with the American Civil Liberties Union to discuss the technology last year, and committed to anonymous data transfer, with no initial objections voiced. Specialists in Michigan and elsewhere are looking at ways of shielding motorists' privacy. Potentially even thornier are legal issues that extend not just to malfunctions in vehicles themselves – worrying enough for the carmakers – but to the reliability of public infrastructure.
For the technology to work, equipment must be standard across the US from the first day, says Mr Krueger, and "has to work in every state from day one". The state and federal departments of transport, together with the eight carmakers and regional authorities, are due to decide late next year whether to recommend national deployment to the US Congress.
If it gets the go-ahead, the infrastructure will start to appear on the roadside within about three years.
16.1.07
Reinventing innovation at consumer goods companies
Reinventing innovation at consumer goods companies
A range of orthodoxies is making it harder to develop breakthrough products in the consumer goods industry. It urgently needs a reformation.
Erik A. Roth and Kevin D. Sneader
Web exclusive, November 2006
For years, consumer goods companies excelled at innovation: the steady introduction of profitable, convenient, high-quality products—ranging from disposable diapers to frozen dinners—that changed the daily lives of consumers. Recently, however, these companies have become increasingly vocal about the poor returns on their investments in product innovation. More new products are being launched, but fewer of them are truly innovative (Exhibit 1).
Paradoxically, little has changed—and that's the problem for the consumer goods sector. As markets have matured, tried-and-true processes for selecting ideas, determining business models, and making investment decisions have become less productive. Existing methodologies have turned into orthodoxies: established ways of doing business that reinforce the status quo and hinder the adoption of novel, tailored, and flexible approaches to innovation. In defining "the way things are done," these orthodoxies also dictate what a company should not do. And because they represent deeply embedded mind-sets shaped by corporate tradition, culture, and values, they are difficult to unwind.
Clearly, not all orthodoxies are wholly undesirable: many of them facilitate the efficiency and predictability that large companies need. Nonetheless, they inhibit the development of breakthrough innovations, which can be six times as productive, measured in terms of the average percentage of sales within a category, as a typical incremental change (Exhibit 2).
Other industries have their own orthodoxies, but four are particularly ingrained in consumer goods, in the form of conventional wisdom:
- Innovation starts with existing business models and categories.
- Focus groups are at the heart of efforts to generate the insights companies need.
- Companies should rely on internal resources first for innovation.
- Companies should come up with as many ideas as possible and "let a thousand flowers bloom."
Starting with current business models
Consumer goods companies that stick to what they know—business models based on finely tuned business processes, existing facilities, and long-standing relationships with suppliers and customers—believe they can generate predictable results. When companies free themselves from this orthodoxy, they move beyond the development of the latest type of soda or the newest fragrance for soap (incremental moves that run the risk of overextending brands without delivering substantial growth). Instead, they take business-changing steps such as extending brands into adjacent categories, creating "platform" brands that support products across a number of categories, and moving into the white spaces between categories. Consider the following examples:
1. Extending existing brands into adjacent categories. For years, P&G's Pampers products focused on a specific consumer benefit—dryness—and overlooked opportunities such as "swimmers" (diapers children can wear in the water). Furthermore, the company categorized both diapers and babies by weight, since it believed that their weight corresponded with their absorbency needs. In 2001, P&G began to see the market differently. Through market research, it discovered that the absorbency needs of babies also correspond closely with their stage of development, as defined by the type and amount of their physical activity. Subsequently, P&G reintroduced its Pampers premium line as Pampers Baby Stages. Realizing that it also could extend the trusted Pampers brand beyond diapers into adjacent, complementary categories, it now offers wipes, disposable bibs, and other products. Since the launch of Baby Stages (which encompasses the product variants Swaddlers, Cruisers, and Easy Ups), P&G's share of the diaper market has risen to 51 percent in 2005, from 41 percent in 2001, and its share of the training-pants market has increased to 18 percent, from 0.5 percent over the same period.1 Such stellar growth is very rare in a mature and competitive category.
2. Creating a brand that plays in a number of categories and businesses. When PepsiCo acquired Quaker Oats in 2001, the Quaker brand had already managed to refresh its old-fashioned image by moving into value-added categories such as granola bars and cold cereals. Since Pepsi's acquisition, Quaker has reached new levels by viewing its brand as a lifestyle choice rather than as a category. Quaker now stands for wholesome quality, health, and wellness (rather than a specific need state), thus allowing Pepsi to stretch into new product areas such as breakfast cookies, weight control instant oatmeal, and a variety of innovative snacks.
3. Moving into the white spaces between categories. Many breakthrough innovations arise in the white spaces between existing categories, because opportunities to introduce or fuse consumer benefits are richest there. Witness the breakfast bar, a product that combines the taste and benefits of traditional breakfast cereals with the portability and packaging of energy bars (themselves an innovation largely advanced by the success of PowerBar). Thanks to changing consumer needs and new delivery technologies, cereal makers have successfully expanded their brands into this new category. Indeed, "on-the-go" nutrition is shaping many product categories.
How can companies increase the odds of making such moves successfully? One tactic is to look assiduously for combinations of brands, technological break-throughs, and insights that help a company address a broader set of consumer needs and so spawn multiple innovations. The artificial sweetener Splenda is a breakthrough product with applications in a number of brands, such as Diet Coke with Splenda and Splenda Brown Sugar Blend.
Facilitating the out-of-the-box thinking required to identify innovation platforms is often difficult for consumer goods companies, whose managers and employees are organized by geography, business unit, brand, category, or customer. Specialized teams with discrete resources, incentives, processes, and directions—including a mandate to focus on innovation—may be needed to foster cross-functional activities, such as the systematic fusion of consumer, technical, and industry knowledge to transform seemingly unrelated ideas into feasible product concepts. Researchers gather and brand marketers interpret data on profitable consumer segments. Together with R&D, the team explores current, developing, and even hypothetical technologies. Finally, strategists share relevant analyses of market dynamics and other contextual issues to help refine ideas (for instance, by modifying the positioning of a product or creating customer-specific variants to better meet the needs of channel partners).
The rewards of this approach are unique insights that can be translated into differentiated new products and businesses. A food product company, for example, conducted a weeklong workshop to generate new ideas by combining consumer, technical, and industry knowledge. An internal team developed go-to-market plans for two new business units with separate structures, leadership teams, and income statements. One of the resulting products eventually became the second most profitable in the company's entire portfolio.
Relying on focus groups
Orthodoxies also reinforce the reliance that consumer goods companies place on established tools for generating insights about consumers. It's easy to understand the survival of popular traditional techniques such as syndicated market research, simplistic quantitative surveys, and focus groups: they are well understood, and some of them—particularly focus groups—are quick and cost effective.
Yet so many companies use the same tool kit to scrutinize consumers that the resulting insights are undifferentiated. What's more, conventional research methods often gather incomplete information. Because they rarely make it possible to experience the full benefits of new or hypothetical products, they often fail to predict accurately whether consumers will understand the technologies that underpin truly innovative products. Consumers are notoriously poor at articulating needs or benefits beyond those they have already experienced: when asking them to imagine true innovations, companies get mixed results at best. Even an industry standard such as simulated test marketing (which often emphasizes historical consumer reactions to new products) reinforces incremental thinking and can give top scores to innovations that subsequently fail the market test. In short, traditional methods can describe past consumer behavior but rarely uncover the white-space opportunities between existing product categories or the kinds of insights that lead to breakthrough innovations.
Companies should diversify both the techniques for gathering consumer insights and the way these insights are used. Many have succeeded with ethnographic or anthropological research approaches such as in-context interviewing and "living with consumers": observing people buying and using products in stores, at work, in restaurants, or at home. Leaders are pushing the envelope further by creating new environments—computer simulations, mock stores, model "homes of tomorrow," and more—to observe purchases and consumption. In this way, managers develop a deeper understanding of the motivations that shape consumer behavior. Consider these examples:
1. General Mills observed its target market—children—playing in school yards when it developed Yoplait's Go-Gurt, one of the fastest-selling yogurt-based products in the United States. The company realized that children, given their active lifestyles, would prefer a convenient on-the-go product that could be opened quickly and held in one hand. The solution, a packaging innovation, gave rise to Go-Gurt: yogurt, in a squeezable tube, that kids can eat without a spoon.
2. Nike marketers, armed with next-generation athletic-shoe prototypes, visit inner-city neighborhoods in major urban areas to interact directly with target consumers. The company can borrow much of its style, attitude, and imagery directly from its customers while simultaneously gauging reactions and building buzz around upcoming products.
3. Dove's recent Campaign for Real Beauty created a vibrant online community that encouraged women to debate the concept of beauty. By monitoring these forums, Dove gathered information critical to developing products that challenge existing paradigms (such as the female consumer's desire for "flawless" skin) in the skin care and cosmetics industries.
Relying on a company's own resources
Most consumer goods companies need to change their interactions not only with consumers but also with other external parties. Historically, these companies have relied primarily on their internal capabilities to manage innovation. But a recent analysis across major consumer goods categories demonstrated that the overwhelming majority of US patents arose outside the top seven global consumer goods companies (Exhibit 3). In the laundry and home care category, for example, 95 percent of the patents filed from 2002 to 2005 did not originate within them.2 Indeed, the leading companies constitute only a tiny fraction of the world's consumer goods innovators.
Yet our research suggests that few companies look beyond their advertising agencies, to the many alternative external sources of insights: suppliers, venture capital firms, entrepreneurs, and inventors. This oversight may prove costly, since external partners can spot trends, create competition for complacent in-house teams, share technologies and manufacturing processes (in some cases developed for other purposes), and even craft fully developed product concepts. Consider a few examples.
1. Through a joint venture, Clorox (which acquired Glad Brands in 1999) gained access to a critical patented plastics technology that archrival P&G had developed for its baby, feminine-care, and paper businesses. The result of this unlikely marriage was Glad's groundbreaking product Press'n Seal, whose distinctive technology improved the underlying margins of Clorox's business and allowed P&G to generate income from its intellectual property.
2. Coca-Cola and Alcoa observed that consumers store most sodas at home in pantries and have only a few cold ones in refrigerators at any given time. Warm cans limited consumption. With this insight, the companies used Riverwood International's (now Graphic Packaging) packaging technology to create a cardboard case—the Fridgepack—that fits in refrigerators more easily. Incremental volumes rose dramatically, benefiting all three companies.
3. P&G's Connect+Develop program is well recognized as one of the most outward-looking efforts in the whole industry. The company's CEO set clear metrics and targets, such as boosting to 50 percent the proportion of innovations incorporating external ideas, from 35 percent today and 15 percent in 2000. In addition, P&G introduced incentives so that its business units receive credit for sales and profits generated through external relationships. It has also pioneered the use of collaborative online communities, which have become fruitful sources of innovation. P&G now systematically combs the world for innovations it can improve through its own technology, marketing, or distribution. The company uses its extensive external network—academics, alumni, suppliers, technical communities, consumer communities, creative agencies, bankers, and venture capitalists—both to generate ideas and to complete deals.3
Helpful as external relationships can be, collaboration does have its perils. In particular, commonly tapped external partners—creative agencies and design studios, in the case of consumer goods companies—can become insiders over time and lose the external perspective necessary to challenge conventional wisdom. Best-in-class innovators avoid this problem by creating external boards of industry thought leaders who meet periodically to supply objective, outside-in perspectives on the company's direction. Given the power of outside ideas, companies should experiment with various approaches for sourcing, jointly creating, and commercializing intellectual property with external partners.
Letting a thousand flowers bloom
Unless companies manage their portfolios effectively, they cannot rationally determine which projects to invest in and which to discard. In fact, our recent research confirmed that consumer goods companies have more ideas than capacity to develop them.4 Top innovators in consumer goods meet this challenge by aligning their innovation strategies with their portfolio decisions.
Many other companies, however, are overburdened by a principle of orthodoxy: letting a thousand flowers bloom, or creating portfolios loaded with less risky, incremental ideas. To be sure, a few lucky companies play in subcategories, such as yogurt and gum, that are growing rapidly enough to absorb large numbers of incremental ideas. And incrementalism can serve certain purposes, such as maintaining market share or achieving short-term financial goals. However, most companies must actively prune their pipelines, place bets, and back winners.
Few do, however. Some risk-averse consumer goods companies believe that packing their pipelines with projects, however small and derivative, will help them avoid prematurely discarding winners or, worse, the "next big thing." Incremental projects are also taken up for alleged strategic reasons (one of which is that they are the pet projects of powerful people). Industry convention also plays a role: the average brand manager has only two years to earn a promotion and isn't likely to invest in risky ideas that will take longer to realize.
Unfortunately, traditional evaluation tools (such as returns on investment and net present value) increase the likelihood of prematurely eliminating potential breakthrough ideas and of adopting incremental ones. To predict the performance of incremental innovations, companies analyze various characteristics (say, the most important customer segments) of similar products. By contrast, a company's projections for potential breakthrough ideas, even with historical data for more or less similar products, will be less accurate. Such inaccurate projections can lead companies to underestimate the sales and profits from such projects, which are then killed. Of course, the opposite could happen—profits could be overestimated—but that isn't likely in risk-averse consumer goods companies, given the number of unknowns.
Some companies defend their tendency to let small projects proliferate: they claim that a constant stream of more predictable ideas makes them better able to forecast revenues and profits. And it does, but at a price. First, companies fail to consider the opportunity costs of failing to pursue breakthrough innovations systematically. Second, they underestimate the cost of complexity, typically in the form of insufficient resources for ballooning numbers of projects. (The more projects a company attempts to push through, the more likely it is to have less than optimal operations, which could even strain its relationships with channel partners.)
Finally, these problems become worse as companies grow. Even if the average value of each project stays constant, the number of projects required to sustain high growth rates increases substantially, thus making the effort more complex and less fruitful. Recently, we worked with one senior executive who realized that an almost exponential increase in the number of initiatives would be required to meet his company's growth goals during the next five years, given the ever smaller average expected value of each innovation. Another client discovered that his company's growth goals remained beyond reach, despite the hundreds of innovation projects under development.
Rather than treating all projects equally, consumer goods companies should recognize that they can't develop incremental innovations and breakthrough ideas in the same way. Because the former are usually derivative products targeted at some large group of core customers, they tend not to change as they move through the development process. With such incremental ideas, companies primarily need to confirm that the product is feasible and that current consumers are interested in it. They can develop such products effectively through a standard stage-gate process, which evaluates a product at predetermined intervals. If a project does not meet certain criteria, such as the estimated sales volume, it is abandoned.
By contrast, potential breakthrough ideas aim to offer new sets of consumers substantially novel benefits and unproven technical features. They would therefore benefit from an iterative, learning-based evaluation with many market check-in points, similar to those that venture capital firms and high-tech companies use.5 Such approaches might, for example, include iterative rapid prototyping, which uses product concepts to create an ongoing dialogue with consumers whose comments shape the design throughout the development process.
Consumer goods companies, once regarded as pioneers of innovation, are now bogged down by the very practices they hoped would keep bright ideas coming. To kick-start growth and rejuvenate ailing innovation engines, these companies must break free of orthodoxy—a tricky task for large, complex, and global organizations, but one that is sure to pay off.
About the Authors
Erik Roth is an associate principal in McKinsey's Boston office, and Kevin Sneader is a director in the New Jersey office.
The authors wish to acknowledge the contributions of their colleague Lindsey Pippel.
Notes
1 Information Resources (IRI), InfoScan Reviews, United States.
2 We conducted this analysis using data from Delphion, an online data source for finding and viewing information about patents.
3 For additional information on such networks, see John E. Forsyth, Nicolo' Galante, and Todd Guild, "Capitalizing on customer insights," The McKinsey Quarterly, 2006 Number 3, pp. 42–53.
4 Over 75 percent of the companies in McKinsey's 2005 consumer-packaged-goods survey cited an imbalance between the number of ideas and the resources available to develop them.
5 For more information about stage-gate and iterative product development processes, see Richard Holman, Hans-Werner Kaas, and David Keeling, "The future of product development," The McKinsey Quarterly, 2003 Number 3, pp. 28–39.
12.1.07
Leading change: An interview with the CEO of Deere & Company
Leading change: An interview with the CEO of Deere & Company
Bob Lane details the steps his company took to engage the whole organization in an operational and cultural transformation.
Rodger L. Boehm
Web exclusive, December 2006
When Bob Lane became chairman and CEO of Deere & Company, in August of 2000, he inherited a leading producer of agricultural, construction, forestry, and turf care equipment that enjoyed loyal customers, a strong dealer network, and a rich heritage spanning 164 years. He also inherited a company that was, in his words, "asset heavy and margin lean," too often dissipating economic value and less prepared to compete in a changing and more demanding global environment than it could be.
Lane, at the time an 18-year veteran of the company, had held a range of operating positions (including a 2-year term as CFO) and immediately set to remedy these problems. With his leadership team, Lane created an ambitious plan to manage assets more efficiently, cut costs, and manufacture a new generation of products more in keeping with retail demand. The plan aimed to reduce Deere's vulnerability to the cyclical swings and unpredictability of the agriculture and construction markets. All salaried employees received rigorous performance goals aligned with the plan, and Deere developed efficiency targets for each point in the cycle that, if met, would deliver performance exceeding, on average, that of the company's best years.
Six years into the effort, Lane and his team have made remarkable progress. In 2006 Deere's net income topped $1.6 billion—more than double the figure in 2003. Revenues are up 48 percent over that same period. More important, shareholder value added, or SVA (essentially, the difference between operating profit and pretax cost of capital), a key metric Lane chose to guide Deere's journey, topped $1 billion in 2004—twice the company's previous best—and was $948 million in 2006.
In this interview, conducted in September 2006 at Deere's headquarters in Moline, Illinois, Rodger Boehm, a director in McKinsey's Chicago office, spoke with Lane about the role that incentives, communication, and sequencing have played in the changes at Deere; the effect of these changes on the company's culture; and the challenges that remain.
The Quarterly: When you became CEO, in 2000, what were the opportunities and challenges facing the company?
Bob Lane: In 2000 it was obvious that Deere had the benefit of a tremendous heritage, a long history of quality products, a dealer organization second to none, and dedicated and loyal employees. But while we had been recognized for many good things over the years, we hadn't been noted as often for having a great business. A good business, certainly—compliments to the dedicated and talented employees who had come before—but Deere was not yet a great business.
We were operating in a very asset-heavy way, which consumed enormous amounts of cash, and our margins were under pressure. Even in the good times, we weren't performing at particularly great levels, and in the bad times we were losing enormous amounts of economic profit. For example, we had introduced a very sophisticated combine harvester in the summer of 1999, and it was a great product, a magnificent product. But it was not a great business. In fact, even at the top of the cycle it was barely carrying its cost of capital. So our opportunity and challenge was to retain all of the good things about Deere, while at the same time recognizing that performance could be taken to a higher level worldwide.
The Quarterly: Why was Deere's operational performance less than satisfactory?
Bob Lane: We'd organized ourselves in a very decentralized way. Every factory optimized its own operations to produce at a steady, level rate. While such arrangements are very efficient for the single factory, they're not optimal for the whole business. Deere is not only in highly cyclical businesses but in highly seasonal ones as well, and level production therefore tends to lead to overproduction when markets are turning down. Moreover, there's a lot of complexity involved because our products are amazingly different in function and not that similar to one another. Combines aren't like tractors. And combines aren't like seeding equipment or forestry equipment. The result was that we had grown to be excessively asset heavy and margin lean.
The Quarterly: You chose SVA as a critical metric to address that problem. Why?
Bob Lane: We are a capital-intensive business, and yet we hadn't really focused sufficiently on tightly managing our assets. So it was clear to me, back when I first became CFO actually, that a simplified form of economic profit—focusing on the left-hand side of the balance sheet—would be just the ticket. My desire was to have something all of our operating people could embrace. I felt that the Deere employees with whom I had spent virtually my entire career would benefit from something profound but very straightforward, intuitive, and simple.
The Quarterly: Were there management challenges associated with implementing SVA?
Bob Lane: The challenge, I think, was that it was a new way to run the business. It would not be enough to have a few finance people understand what SVA meant; thousands of operating people needed to embrace it and make appropriate decisions. The question was how could I, as the chief spokesman, work together with the rest of the senior-management team to propagate this?
The Quarterly: What do you think made the difference in getting employees behind SVA?
Bob Lane: One factor was the unity of the senior team. Another factor was the simplicity of the calculation itself. Importantly, it was rooted to the left-hand side of the balance sheet, not, as is typically the case, on the right-hand side. The denominator was basically receivables, inventory, and property, plant, and equipment—things our operating people knew how to manage. And the numerator was something we already calculated and published: operating profits by division. Further, for each equipment operation we said there'd be a simple-to-understand charge for capital: 1 percent a month. Very straightforward. So if you earn 12 percent operating return on operating assets and you receive a 12 percent charge, you'd have zero economic profit.
The Quarterly: Did you make organizational changes to support the initiative?
Bob Lane: Yes, early on, with the support of the board, we divided the agricultural division into two parts: worldwide harvesting, which included things such as combine harvesters and cotton pickers, and a second part that included tractors and implements. This allowed us to focus more tightly on the underlying economics, product line by product line. This is not rocket science, but it was a very big breakthrough—to have the same financial metrics broken down for every single product line worldwide. For example, now our combine factories in Zweibrücken, Germany; Jiamusi, China; Horizontina, Brazil; and East Moline, Illinois; could all work together as one worldwide product team with common metrics.
The Quarterly: How did you get employees to align their behavior with the new goals?
Bob Lane: Simplicity and consistency. We knew we needed to raise our performance significantly, but we first had to better define, with the entire senior-management team, exactly how high the bar would be. And I think there were two concepts that unlocked it for us. One was a tool—an online performance-management system—that we implemented across the salaried workforce. Every one of our 18,000 salaried employees, top to bottom, now had to develop goals in advance that were explicitly aligned with the company's goals. Again, not rocket science, but vitally important.
The second was an upward sloping line of performance expectations that turned SVA into a meaningful, useful tool that recognized the cyclicality of our business. So to support SVA for each product line, we developed targets for operating assets and operating returns at different places in the cycle: twenty percent OROA1 at normal sales volumes, 12 percent at the bottom of the cycle, and 28 percent at the top—the key being that these targets would cause us to perform, on average, better than we had performed in our best year prior to that. This performance line was considered to be a very high bar, but it gave everybody in the organization clear goals to work on—anywhere in the world, and in any market condition.
The Quarterly: Was compensation also changed to reinforce the new goals?
Bob Lane: Yes, and that has been indispensable. What we did, under the auspices of the board, was rework the entire system to totally align compensation to SVA so that all the incentives in the short and medium term were related to economic profit. Long-term compensation for the top 1,000 is linked directly to the stock price. Compensation is certainly not the only reason to work at Deere, of course, but if you can, it's great to financially reward the people who are making these good things happen.
The Quarterly: How do the incentives work?
Bob Lane: Our short-term incentive, which applies to all salaried employees worldwide, is linked to the sales cycle. So it's now possible for individuals in a particular division to receive a very good bonus at the bottom of the cycle if the division is doing a good job and even receive a poor bonus at the top of the cycle if it is not performing adequately. Before, when business was bad out there, it was impossible, really—given the operating leverage and the heavy fixed costs of the operation—to earn a bonus.
The midterm incentive applies to around 6,000 people as one worldwide team. When we create economic value, or positive SVA, we accrue the incentive entirely in one year. However, the bonus is at risk and only paid out over four years. It can be lost if economic value is destroyed in subsequent years. In fact, anyone in the world can drain that money out—so every employee, regardless of division, has an economic interest to support other operations in the company. It's one thing to not contribute to someone else's bonus, but how about being the one that took away a bonus that was already accrued? The bonus is paid out if performance is proved sustainable. It's been an important reinforcing mechanism.
The Quarterly: How has the focus on SVA been received by Deere's union workforce?
Bob Lane: We've been very straightforward with our union colleagues and clear about what we wanted to accomplish, and they have been very involved in our thinking. In fact, when customers, board members, or other employees go out on the floor, union members will talk about product lines being SVA positive or negative. The recognition is there.
Moreover, our union colleagues have contributed to our progress. When we renegotiated the United Auto Workers' contract in 2003, we had quite a few discussions with them so they would understand how they could achieve better rewards. And their productivity, in particular, has dramatically improved: it's up about 9 percent since 2003. Without that improvement, we would need millions of additional labor hours to get our product out the door. These employees have shared in the benefits of improved productivity.
The Quarterly: What other changes—on either the cost or revenue side—did the focus on SVA necessitate?
Bob Lane: Unfortunately, we had to close a number of factories and discontinue some product lines because they weren't able to carry their weight. In addition, we did not want to overproduce, so when markets turned down we slammed our foot on the brake, which meant that earnings were suddenly hurt in the short run. This was, of course, excellent for the business but a bit painful.
The Quarterly: Looking back, what role did communications play in getting the necessary buy-in among Deere's various stakeholders?
Bob Lane: I think the key was that everybody—employees, dealers, suppliers—heard exactly the same message: we have to perform better for shareholders, and we're going to organize this company to have a great, sustainable business that delivers better shareholder returns. The economic profits have to increase. A clear and consistent message helped show our conviction. So even though the details were evolving, the direction was clear.
For example, when SVA was introduced, in December of 2000, we didn't have all of the specifics developed. In fact, during one of our management meetings early in the journey, I held up a great big meat bone in front of the group and told them that while our strategic direction and performance imperative was clear, we would put more meat on the program's bones over time. This was also true of the changes around compensation. The details came after we were already sharing with everybody how the business was going to be organized around SVA.
The Quarterly: Could you describe the role sequencing played in your approach?
Bob Lane: My original hope was that we could both dramatically improve our operating performance and grow rapidly at the same time. We quickly realized that we needed to establish a stronger operational foundation and therefore needed to improve our operating performance first. So we established two strategic imperatives early on—"Sprint North" and "Seed East." The former was focused on improving our operating efficiency in order to create the foundation for growth. The latter was focused on laying the initial seed for growth through a fairly contained and targeted set of initiatives. "Seed East" would later become "Drive East," as we established a stronger operational foundation and began to accelerate innovation and pursue global growth opportunities more aggressively.
Looking back, this desire to both grow and improve operational performance at the same time created an enormous amount of skepticism early on. And if I had it all to do over again I would be clearer and crisper at the front end about the priorities. The lesson for me was that sequencing is very important in terms of establishing the right expectations with employees and investors, and when you don't get it right it causes a lot of skepticism—legitimate skepticism.
The Quarterly: How have these changes affected Deere's culture?
Bob Lane: Trustworthiness is a vital part of Deere's heritage. For customers, that means if we say we'll make it right during the warranty period we'll make it right, even if it costs us a lot of money. For employees, it means people know where they stand. It's the same for suppliers too. One supplier told me, "You know, I wouldn't call Deere supplier friendly, but I would call Deere supplier fair." And I was pleased to hear it. As an organization, Deere aspires to be a transparent company: no smoke, no mirrors, no tricks. We're straight down the middle.
However, there were aspects of our culture that needed to change. One aspect was what you might call a "best-efforts" mind-set. If I could use an American football analogy, it was as if you could always count on Deere to move the ball at least six or seven yards. And when we got to that point, we could say "good work, good enough"—even though we hadn't reached the first-down marker. Now people are expected to have exhausted every legitimate effort to move the ball further and meet the goal, and then move the ball further again. The goal is clear.
Deere is also changing from being a family to being a high-performance team. "The John Deere family" used to be a common expression. Now that doesn't mean that in a team you don't support people when they make mistakes, but you do have to perform to high expectations. And frankly, not everybody wants to be on a high-performance team. Some people prefer to play intramurals. That's okay, but they are no longer a good fit for Deere.
The Quarterly: Have Deere's talent requirements changed as a result?
Bob Lane: In the same way that the performance bar has been raised, the skills required of our employees have gone up. Our competition is more aggressive and global in nature, and the financial demands are that much higher. And we expect our people to respond to the competition and achieve higher performance standards in a very ethical way. To respond to this challenge, there are two important institutional skills needed.
First, we need a stronger customer orientation. In the past, we probably had more of an engineering approach, versus starting with the customer need. Today it's more important than ever to understand the customer fully—maybe better than the customer understands him- or herself—and marry that understanding with innovation and technological capabilities. Second, collaborative skills will be increasingly important as we broaden our global horizons. Our strategy and performance goals require teamwork worldwide—and our culture is much more focused on enabling people to work together. This takes a different mind-set, but it's a skill that's rewarded here.
The Quarterly: You spoke of Deere's culture as being "straight down the middle." Is it difficult to balance ethics and performance, given the new demands on employees?
Bob Lane: It is a challenge, but it can be done. And we have created a new set of tests to ensure that Deere will have a high-performance culture and, at the same time, retain an environment of integrity. The emphasis is squarely on "how." It's the only word underlined in our strategy statement. So that becomes a statement to our people—how we do our business is a very important factor.
The message to our people is clear: if you get everything else done right but you don't treat people properly or you're not straightforward, you don't work here. And sometimes that hurts a lot. In fact, at our worldwide management meeting I recently announced the number of people who don't work here anymore because—even though their work was satisfactory in every other respect—how they did business was not acceptable. When I announced the number our worldwide leadership team was silent . . . silent. It got people's attention.
The Quarterly: Despite all of Deere's improvements, you have said that Deere is not yet a great business. Looking ahead, what will it take to get there?
Bob Lane: The main factor is sustainability. Delivering performance over a reasonably short period of time is insufficient evidence of sustainability. We want to be known for performance that endures. Think of our strategy as two engines. The first is sustained, exceptional operating performance, distinctively serving customers while using our assets extremely well. The second is disciplined SVA growth—proving that through innovation and invention we can expand our business and sustain that growth. A great business has both engines thrusting continuously at the same time. Those engines will flame out if you don't have the talent—the high-octane fuel to run them. So that's the third strategic component: talent from every background delivering high-performance teamwork.
Ultimately, if our business is going to be great, sustained SVA performance will contribute to human flourishing. At the end of the day, what makes profitable growth sustainable is that our exceptional operating performance delivers products and services that contribute to human advancement. Whether it's food, fiber, wood, water, wind, energy, or recreation—we'll be contributing to human flourishing.
About the Author
Rodger Boehm is a director in McKinsey's Chicago office.
9.1.07
[The cost of not innovating?] Companies will one day rue today's miserly approach to investment
The three Scrooges
Jan 4th 2007
From The Economist print edition
Companies will one day rue today's miserly approach to investment
FOR a businessman, if there is anything better than making money, it must be making more money. Profits are accounting for their biggest share of the American economy since 1950. Interest rates and bond yields are low by historical standards. It ought to be a great chance for companies to expand.
After all, the logic of capitalism is pretty clear. If returns on capital are high (and much higher than the cost of capital), businesses ought to be falling over themselves to invest. In time, that excess investment (by increasing competition) would reduce returns. Profits would return to the mean.
But that does not seem to be happening. Business investment has been rising steadily, rather than spectacularly. From 1993 to 2000, American non-residential fixed investment grew by less than 8% in only one year. It has beaten that mark on only one occasion since. And even that rebound (in 2005) was followed by a temporary slowdown in the second quarter of last year.
One answer to this conundrum could be that businesses in America and Europe no longer need to invest as much as they used to. They have "outsourced" their investment to India and China, which are rapidly expanding their productive capabilities and supplying Western companies as sub-contractors.
However, Henry McVey, a strategist at Morgan Stanley, says that the answer lies in a "misalignment triangle", comprising listed companies, private-equity groups and fund managers. Companies are simply not using their balance sheets effectively. They are retaining cash, rather than borrowing to exploit the gap between the returns they can achieve and the cost of finance. Indeed, Mr McVey says that many companies earn a lower return on equity than they make on their operating assets; that is a very poor deal for shareholders.
Why is this? One reason is that companies have very high hurdle rates for new projects, higher than seems justified by a world of low interest rates. But that really reformulates the puzzle in a different form; why are hurdle rates so high?
Mr McVey thinks that executives are being cautious, given the regulatory scrutiny that followed the collapses of Enron, an energy firm, and others. Executives face possible prison sentences if things go wrong; keeping a bit of cash on the balance sheet is a kind of insurance policy. Managers may also have learned a lesson from the investment splurge of the 1990s.
But this cannot be the only factor. Executives are all too happy to return cash to shareholders by buying back equity. This has the great advantage of boosting earnings per share, one of the key measures watched by investors. In turn, this supports the share price on which (thanks to options) bosses' pay often depends.
In contrast, investment in new plant and equipment may take years to recoup. Given the rapid turnover of management, executives may feel there is little point in planning for the long term, when only their successors will reap the benefits.
A similar issue affects the second point on Mr McVey's triangle; private-equity firms. They usually plan to own companies for no more than five years and the main focus is in maximising cashflow to meet interest payments and to pay down debt. Capital expenditure is a hindrance rather than a help.
But such groups are also benefiting from the caution of those they are buying from. As Mr McVey says, "Whereas in the past, [leveraged buy-out] firms actually had to know something about the business they were buying, today they can earn huge returns by merely getting rid of the excess cash on the balance sheet."
In theory, investors ought to be wise to this. They should be urging companies to borrow money to enhance returns and they should be resisting buy-outs, because they understate the potential value of the companies in question.
In practice, however, Mr McVey argues that investors, particularly fund managers, are only too happy to accept a bid premium from a private-equity group. The lift such bids give a portfolio help them to beat the index, and possibly their competitors, keeping clients happy for a while.
This is good news for stockmarkets in the short term, in that profits may remain high—or at least will not be undermined by the folly of executives. But the bad news is that underinvestment will weaken companies' long-term health. The conglomerates behind the takeover booms of the 1970s and the 1980s resembled today's private-equity groups. They aimed to use their financial expertise to improve returns across a range of industries. But they tended to run subsidiaries to maximise cashflow, and the businesses slowly deteriorated, like a poorly maintained house. Today's skinflints may do the same.
23.11.06
23.10.06
The New Yorker: Fact: "THE FORMULA
What if you built a machine to predict hit movies?
by MALCOLM GLADWELL
Issue of 2006-10-16
Posted 2006-10-09
One sunny afternoon not long ago, Dick Copaken sat in a booth at Daniel, one of those hushed, exclusive restaurants on Manhattan’s Upper East Side where the waiters glide spectrally from table to table. He was wearing a starched button-down shirt and a blue blazer. Every strand of his thinning hair was in place, and he spoke calmly and slowly, his large pink Charlie Brown head bobbing along evenly as he did. Copaken spent many years as a partner at the white-shoe Washington, D.C., firm Covington & Burling, and he has a lawyer’s gravitas. One of his best friends calls him, admiringly, “relentless.” He likes to tell stories. Yet he is not, strictly, a storyteller, because storytellers are people who know when to leave things out, and Copaken never leaves anything out: each detail is adduced, considered, and laid on the table—and then adjusted and readjusted so that the corners of the new fact are flush with the corners of the fact that preceded it. This is especially true when Copaken is talking about things that he really cares about, such as questions of international law or his grandchildren or, most of all, the movies.
Dick Copaken loves the movies. His friend Richard Lig"
4.10.06
Allergy vaccine shows hay fever promise - health - 04 October 2006 - Print - New Scientist: "Allergy vaccine shows hay fever promise
* 22:00 04 October 2006
* NewScientist.com news service
* Roxanne Khamsi
A six-week vaccine regimen appears able to reduce hay fever symptoms by 60% for at least two years, according to a preliminary study.
Researchers say the vaccine approach avoids the side effects of the steroids often used to treat allergies. And it gives a faster result than pollen injections, which condition the immune system over a course of several years, they add.
The vaccine, which uses snippets of DNA to train the immune system, has shown great promise in the new trial. “It is the first time the approach has been applied to this disease,” says Toshiaki Kawakami at La Jolla Institute for Allergy and Immunology in California, US.
It could offer a much needed alternative for patients who fail to respond to conventional therapies, such as antihistamines to control their allergic response, Kawakami says.
Immune cascade
About 40 million people in the US alone suffer from seasonal allergies – a condition commonly referred to as hay fever – which causes the body to produce excessive amounts of the immune chemical histamine. This leads to the characteristic hay fever symptoms, such as itchy eye"
29.9.06
Battery Boasts USB Rechargeability - Hardware Technology News by TechWeb: "Battery Boasts USB Rechargeability
By Laurie Sullivan, TechWeb Technology News
U.K.-based Moixa Energy Holdings Ltd. has launched a USB-rechargeable battery, the USBCell.
The AA battery opens to reveal a USB connector. It can be plugged into any PC USB port to charge. The batteries are already for sale in the United Kingdom, two for about $24, and will go on sale soon in the United States.
When you plug them into the USB port, a light around the rim means they're charging. A slow flashing light indicates they're 90 percent charged. The batteries are ready when the light shuts off. Each takes five hours to charge.
AAA batteries, 9-volt, and lithium-ion batteries will follow shortly, the company said. Moixa Energy also will release USB-rechargeable cellular phone batteries.
Moixa Energy launched the batteries at DEMOfall 2006 in San Diego, Calif., earlier this week."
28.9.06
RingCube touts software that squeezes a PC onto iPod or keychain
RingCube touts software that squeezes a PC onto iPod or keychain by Associated Press
http://www.technologyreview.com/read_article.aspx?id=17543
| RingCube touts software that squeezes a PC onto iPod or keychain By Associated Press Mobile computing just got more portable. Making even the latest pocketbook-sized ultra-mobile personal computers look more like lumbering giants, RingCube Technologies Inc. unveiled software that can virtually squeeze a PC onto an iPod, USB keychain drive, cell phone or any gizmo with digital storage space. RingCube's MojoPac software mirrors a computer's personal settings, programs and data on a storage device. Then, when it's connected to any computer running Microsoft Corp.'s Windows XP operating system, the virtual desktop will run in a window of the underlying PC. ''You're taking your digital soul with you on any portable storage device,'' said Shan Appajodu, chief executive and co-founder of RingCube. A user could toggle between the two computing environments. The company contends that everything you do with your MojoPac PC will remain private: the underlying host PC won't retain any of the files or cache copies of what you did on MojoPac, the company said. The software can be downloaded and tested at no cost for 30 days. If bought within a month of the product's release, it will cost $29.99 with up to three additional licenses for $14.99 each. After the introductory period, the price will jump to $49.99, with up to three extra licenses costing $24.99 each. MojoPac will be shown off at the DEMOfall 2006 conference, an elite showcase of emerging technologies being held this week in San Diego. ''I lug my laptop around with me everywhere and the idea that I could bring my work environment around with me on a USB key is really attractive,'' said DEMO producer Chris Shipley. The software works by creating a virtual operating system that runs the programs users load onto the storage device. RingCube says MojoPac supports any off-the-shelf applications, including PC video games and applications such as Adobe Photoshop or Microsoft Office. The idea is to transform any computer found at Internet cafes, dorm rooms, libraries or business offices into your personal computer, said Appajodu, who started developing the product more than two years ago. Mountain View-based RingCube also hopes to introduce a prepackaged version of MojoPac such as on a keychain drive as a low cost computing alternative in developing nations, where many can't afford their own computers. Many people in those areas can't afford personal computers but have access to Internet kiosks. MojoPac is available as a software download for $49.99 at www.mojopac.com. Copyright Technology Review 2006. |
Opinion: High-Definition Video--Bad For Consumers, Bad For Hollywood
By Cory Doctorow,
September 26, 2006 (12:44 PM EDT)
URL: http://www.techweb.com/wire/193005696
The high-definition screen has become a kind of Christmas tree, overladen with ornaments hung by regulators, greedy entertainment execs, would-be monopolists from the tech sector, broadcasters desperate to hold onto their spectrum, and even video-game companies nostalgic for the yesteryear of impervious boxes. The tree is toppling -- and it might just take out a few industries when it crashes.
High def kicked off in the '80s, when Detroit was losing the car wars to Japan and Motorola was figuring out that radio spectrum was pure gold, if applied to mobile phones. Moto pointed out that the National Association of Broadcasters' members were squatting on lots of spectrum they'd been allocated, but hadn't lit up with TV signals. (Broadcasters get their spectrum for free, and in exchange, we're supposed to get some programming over those airwaves.) Motorola proposed to buy the idle spectrum from the Federal Communications Commission, and use it to run a phone business.
The NAB panicked -- there's nothing a corporate welfare bum hates more than an end to its government handouts. So the broadcasters cast about for an excuse, any excuse, to continue to hold onto our valuable radio spectrum while doing nothing much with it. They found that excuse in Japan, where high-definition sets were being met with popular and critical acclaim. Japan -- having destroyed the American auto industry -- was about to destroy American broadcasting with its devious high-def sets, creating a high-def gap that America would struggle in vain to bridge!
The nervy broadcasters asked the commission to leave all that fallow spectrum intact, and furthermore, to allocate them even more spectrum, so that they could broadcast HD signals alongside of the analog ones. Once enough Americans had bought high def-receivers, the FCC could switch off the analog towers, return the spectrum to the American public and then, then it could be sold to the likes of Moto for mobile applications.
Incredibly, the commission swallowed this, and gave the broadcasters even more spectrum. The broadcasters approach spectrum like a dragon approaches gold: it is something to be hoarded and jealously guarded, but they're not much interested in using it. So they took all that high-def spectrum and built a nest of it, rested their ponderous, scaly bellies on it, and never lit it up.
By the 2000s, Congress and the FCC were desperate to get that spectrum in use. Representative Billy Tauzin (now a shill for the pharmaceutical industry) offered to give Hollywood any law it wanted in order to entice them to open their movies to broadcasters, which might, in turn, entice broadcasters to light up those towers, which might entice Americans to throw out their standard TVs. No, really! This is the kind of Rube Goldberg strategy that they're chasing! In the U.K., by contrast, they simply created a standard for "FreeView," a box that tunes in 30 free, standard-definition digital TV channels and plays them on your old set, giving Brits an unbeatable enticement to switch to digital: one box gets you free cable for life and you don't have to throw out your TV.
If the studios had their druthers, they'd just encrypt high-def signals. An encrypted signal needs a key to decrypt, and you can set up all kinds of rules about when, how, and who can decrypt a show by building it into the contract that comes with the key. But you can't encrypt over-the-air TV: The broadcasters get the spectrum for free, and in exchange they have to serve us. It wouldn't do to let them lock us out of the programs aired on our airwaves.
The Broadcast Flag is the law the studios came up with to square this circle. They proposed a Soviet-style planned economy (Fox president Andy Setos, who wrote the Broadcast Flag draft, referred to it as a "well-mannered marketplace") where all TV receivers would have to be built to honor the rules set down by the entertainment industry. The studios would get a veto over any feature that threatened its existing business-model, and anyone who wanted to interface with a TV receiver would have to agree to play by Hollywood's rules. Even video cards, hard drives, and motherboards would fall under this rule.
The Broadcast Flag was adopted by the FCC, and then was struck down by a D.C. court that told the commission its jurisdiction stopped at the broadcasting tower, and didn't extend to your living room. But the studios and the broadcasters continue to advance their plans for a high-def universe, and they continue to use HD as a Trojan horse for smuggling in mandates over the design of commodity electronics.
The first line of this is high-def media players, particularly games and the competing DVD specifications (to call them "standards" is an insult to honest standards), Blu-ray and HD-DVD. These systems only output high-definition picture on their digital outputs, and those outputs are encrypted. To decrypt them on your TV, you need to get permission from the entertainment industry, and to get permission, you have to make a bunch of wicked promises.
For example, you have to promise to honor region codes, those nuisances that try to restrict what country you can watch your lawfully purchased movies in. That's not about copyright: Copyright doesn't let an author tell you what country you can take his books to, nor a director where you can watch his movies. It's just an arbitrary business model that the studios can impose with the force of law, just by scrambling their movies and making permission to descramble contingent on a manufacturer's treating their business model as though it were law.
The new HD technologies include anti-user nasties like "renewability" -- the ability to remotely disable some or all of the device's features without your permission. If someone, somewhere, figures out how to use your DVD burner to make copies of Hollywood movies, they can switch off *everyone's* burner, punishing a limitless number of innocents to get at a few guilty parties.
The HD DRM systems also include gems like "selectable output control" -- wherein some programs will refuse to be played on some devices. As you flip up and down the dial, parts of your home theater will go dark. Creepier still is "authorized domain" -- the ability to flag content so that it can only be played within a "household," where the studios get to define what is and isn't a valid living arrangement.
On top of these restrictions are the punishing "robustness" regimes that come with HD DRM systems. These are the rules manufacturers have to follow to ensure that the anti-user stuff in their devices isn't compromised. It's a requirement to add expensive armor to products that stop a device's owner from opening up her device to see what's inside, and make changes. That's bad news for open source, of course, since open source is all about being able to look at, modify, and republish the code that runs a device.
But even if you don't care about open source, the cash and utility cost of compliance is a hardship. Sony's HD version of the PlayStation costs a whopping $100 more than the non-HD version, and Sony's first generation of Blu-Ray DVD drives *won't play Blu-ray movies* because they can't get sufficient anti-owner countermeasures into the box. Microsoft's 32-bit version of Vista won't do HD, either.
Most extraordinary is the relationship of HD DRM to the world's largest supply of HD screens: LCD computer monitors. The vast majority of HD-ready, 1080i-capable screens in the world are cheapo computer LCDs. Chances are you've got a couple at home right now.
But unless these screens are built with crippleware HDMI or DVI interfaces, they won't be able to receive high-def signals. DRM standards call these legacy screens, and treat them as second-class citizens.
All this may be enough to scuttle HD's future. Let's hope so, for Hollywood's sake.
Because, you see, HD is also poison for the entertainment industry's own products. The higher the resolution, the harder it is to make the picture look good. Standard-def programs on high-def screens look like over-compressed YouTube videos, and when you get a high-def program shot by traditional directors, it looks even worse, every flaw thrown into gaudy relief. Have a look at the HD-native episodes of Friends some day -- it's all gaping pores, running pancake makeup, caked-on hairspray, and freakishly thin bodies with giant, tottering heads.
It's even worse when it comes to computer-generated imagery, that staple of big-budget blockbusters. Computer graphics have a painfully short adolescence, a period of months during which an animation sequence looks impressive. From there, it's a fast, one-way slide into liver-spotted senescence, in which the artifice of the computer becomes a jumble of last year's polygons. When this year's Coke commercials have slicker graphics than last year's $200 million extruded sci-fi product, the last thing you want to do is show it on a giant, high-res screen.
The natural life cycle of computer-aided movies in an era of Moore's Law is to a series of successively smaller, lower-resolution screens. As Geek Entertainment TV's Irina Slutsky says, "An iPod screen is my personal airbrush." Some movies are already dated by the time they hit the big screen -- take Polar Express, which looked so creepy that I almost mistook it for a horror film when I saw it on a megascreen on opening weekend. The next Christmas, I caught it on an old 12" TV at a friend's cottage. It looked terrific -- I nearly forgot that I was seeing pixels, not people.
There are some directors who get HD, to be sure. Mark Cuban's HDNet features a pretty good selection of nice-looking big-screen pictures. Cuban's one of the few entrepreneurs making content intended for a long life in HD, and not coincidentally, he's a staunch opponent of HD DRM systems. You can also get a nice HD experience by picking up a classic film from a master filmmaker -- DigitalLifeTV's Patrick Norton is a fan of Goodfellas at HD.
But for every Mark Cuban and Martin Scorsese, there are a thousand people making programs that look better at standard-def or even smaller -- shows that play well in your pocket but whose props and actors look like cardboard at 100 inches.
That shouldn't surprise us, really: computer users have had giant displays for a decade, and we don't use them to show one gigantic window! Give a computer user a 30" flat-panel and she'll load it up with 25 windows -- some video, some text, some interactive. Blowing all that screen real estate on a single picture is a waste.
Hollywood has fallen into the "horseless carriage" trap: A big screen is like a small screen, but bigger. A personal computer is like a mainframe, but on your desk. In reality, the big living room screen is a different thing altogether. For years, the electronic hearth has lost currency and relevance to households who would no sooner all watch the same screen than wear the same underwear.
The big screen is not a big TV -- big screens are multiwindow workspaces. There's an opportunity there, a chance to bring the family back together in front of the same set. Who's to say that all 100 inches of the living room set should show one football game? Why not give both kids their own spaces to play their own consoles, in corners of the screen, give Mom and Dad their own areas to watch, throw up a browser and some RSS-fed image and text-crawls?
A big screen for big pictures might have sounded good in the '80s, when the FCC was signing over the nation's priceless spectrum to the NAB. But lots of things sounded like a good idea in the eighties: multimedia CD-ROMs, ISDNs, and RISC architecture. It's 2006: We know better now.
Cory Doctorow is co-editor of the Boing Boing blog, as well as a journalist, Internet activist, and science fiction writer.
HDTV Shopping - Five Useful Tips: "HDTV Shopping - Five Useful Tips"
Since lots of people ask...
26.9.06
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Nokia N95 - [updated, official]: "Nokia N95 - [updated, official]
Published by Rafe Blandford at 14:20 BST, September 26th
Nokia have announced the Nokia N95, featuring an innovative double slide design with multimedia controls and a keypad on opposite end of the phones. The N95 is Nokia's first HSDPA (3.5G) device, but also boasts Wi-Fi, WCDMA, quad-band GSM, Bluetooth (including A2DP), IrDA and USB 2.0 connectivity (via mini USB connector). Other hardware features include a 5 megapixel camera, a built in GPS, TV-Out, 3.5mm audio jack, FM Radio, a MicroSD memory card slot and 150MB of internal memory. Read on for full details, pictures and the full press release.
In the hand the most impressive aspect of the device, given its feature set, is its size. At 99mm x 20mm x 53mm (90cc), the N93 packs an impressively amount into a small space. Nokia have managed to add two major technologies to the Nseries line (GPS and HSDPA) while significantly reducing the volume of the device. In length and width dimensions it is larger that the other Nseries slider - the N80, but it is considerably thinner.
HSPDA is the next generationin cellular connectivity. The N95 is a category 6 HSPDA device which means it is up to 10 times faster that WCDMA (3G). Clearly HSDPA support is required at a network level, but many networks have already b"
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Nokia unveils N95 multimedia phone | Tech&Sci | Internet | Reuters.co.uk: "Nokia unveils N95 multimedia phone"
NEW YORK (Reuters) - The world's largest mobile phone maker, Nokia, unveiled a new all-in-one multimedia phone and a new slimmer model targeting U.S. consumers, at an event to showcase its multimedia devices on Tuesday.
Nokia said multimedia is the fastest growing mobile segment and this year it has already sold more than 10 million handsets in its upscale N-series.
The new N95 model, the first Nokia phone with integrated GPS receiver, is expected to retail in volumes in the first quarter of 2007 for the price of about 550 euros (368 pounds), excluding subsidies and taxes, Nokia said in a statement.
The N95 will be the Finnish firm's first with a 5 megapixel camera, and it will also be sold with free maps from Tele Atlas and location data for consumers in more than 100 countries.
Shares in Tele Atlas jumped 3.6 percent on the news, while Nokia shares were 1.3 percent higher at 15.38 euros.
The top camera phones today usually capture 3 million pixels (3 megapixels).
'With the N95, Nokia has joined the megapixel arms race which has "
11.9.06
Bernie URL collection, part 2
| Music | David Byrne has a cool web site with lots of interesting things (see below for more). Right now he has a "radio" station (accessible by iTunes and other software) and a play list of Standards. The Standards, like "Stardust" and "Taste of Honey" are superb, and the artists performing them are wondeful. He also has a good essay on why he picked them. So use iTunes to access it, or go here and enjoy! http://www.davidbyrne.com/music And for good music web sites generally, check this out (yes, it is one strange URL :) http://www.ew.com/ew/article/commentary/0,6115,1195793_4||322351|1_,00.html |
| Literature/Classics | Penguin is going back to the Classics with "Penguin Epics". Very nice little editions. And a relatively easy way to read a classic. I can't vouch for the translations, but Penguin quality is usually good. (I picked up "The Epic of Gilgamesh"...a good summer read. :) ) http://www.penguinclassics.co.uk/static/cs/uk/10/minisites/penguinepics/index.html#findoutmore |
| Videos | This video is subtely clever, if not brilliant http://www.transbuddha.com/mediaHolder.php?id=1400 This is simply lovely http://www.transbuddha.com/mediaHolder.php?id=580 |
| Humour | This is Hilarious! It doesn't matter what they are saying -- in fact, that makes it funnier. It takes some time, but it is worthwhile! http://www.youtube.com/watch?v=HH0awSk7i8Q For something complete different, there's -> http://www.youtube.com/watch?v=fOIM1_xOSro&search=chomsky where Ali G interviews Noam Chomsky. Mind boggling, but funny. (Not sure Chomsky knows who Ali G is....) And now, a public service announcement from David Lynch (the mind boggles!) http://www.transbuddha.com/mediaHolder.php?id=1975 Then there is this: Fellini meets Eminem! http://www.transbuddha.com/mediaHolder.php?id=2000 I really hope this is a spoof, but I fear it isn't! Yes, you can sleep when you are dead..in the meantime, drink Folgers! Yum-o! http://www.boardsmag.com/screeningroom/commercials/2971/ The NSA Wiretap Reveals Subject May Be Paying Too Much For Long-Distance (beware...it's The Onion!) http://www.theonion.com/content/node/49182/print Geeks and groceries...or Star Wars and Lo_foods meet! (Man! Where do some people find the TIME!) http://www.transbuddha.com/mediaHolder.php?id=1997 |
| Oddity | So, you wondered: if I was a superhero, what one would I be? Well, now you can find out! Take this quiz! (Me, I am the Flash! LOL!) http://www.seabreezecomputers.com/superhero/ The secret language of sleep. (This person used to be the web editor of Wired's WebMonkey web site) http://www.evany.com/ Odd. Virtual sweat shop, perhaps.... http://www.mturk.com/mturk/welcome Where the future is going....the omnipresent world. http://preview.local.live.com/ A cool chart showing polling of WWII http://www.talkingpointsmemo.com/docs/wwii-polls/ |
| Humour/Environment | Now THIS is a good trailer for Al Gore's new movie! http://www.transbuddha.com/mediaHolder.php?id=1983 |
| Shopping! | Why BUY all those purses/bags/sacs/etc, when you can just rent? http://www.bagborroworsteal.com And for those of you who like Zara, now there is Zara Home (at least in Mexico!) http://www.zarahome.com/v06/en/home.php |
| Tech/Tools | Be the first on your block to get the latest cool stuff from Google at... http://labs.google.com/ Cool. Trace your email! http://map.butterfat.net/emailroutemap/ Here are some online tools to do Q&D web apps. Ther are databases with database software http://lazybase.com/ ...and info on how to use it http://www.kiwitobes.com/lbexamples.html As well, check out this http://infogami.com/ And http://kiwitobes.infogami.com/evite Some other cool tools Writely http://www2.writely.com/info/WritelyOverflowWelcome.htm ThinkFree http://www.thinkfree.com/common/main.tfo |
| Games | So you are sick of playing Solitaire. AND you have an Internet connection. Try this! http://www.sinkmyship.com |
| Creative Arts | For those of you who like mind maps and other cognitive tools, check out David Byrne's approach to them. http://www.davidbyrne.com/art/tree_drawings/index.php Not that you would, but the fact that you could sample these tunes is interesting: http://creativecommons.org/wired/ |
| Fashion | Very Cool Puma from Philippe Starck http://starck.puma.com/pindex.jsp |
| Information/The Web | A very cool way to look up stuff - check out some of the older sites, like cnn.com or ibm.com http://www.archive.org/index.php |
| Fashion/Technology | Not sure if Walt Whitman was thinking of this when he wrote: I sing the body electric (I run the body electric?), but hey, it is still a very cool use of iPod as a running device. http://www.nike.com/nikeplus/ |
| Culture | You need access to the Nytimes web site, but this article on Buckminster Fuller and Isamu Noguchi is very interesting http://www.nytimes.com/2006/05/19/arts/design/19nogu.html?_r=1&oref=slogin |
| Humour | If you have a four year old boy, as I do, then these are hilarious. If not...well, they are still pretty funny. http://www.mcsweeneys.net/2005/11/11murray.html http://www.mcsweeneys.net/2006/1/6murray.html http://www.mcsweeneys.net/2006/5/25murray.html |
| Humour | This is also very funny. Cruel...but funny. (Not that anyone in their SWEET mind would have Whitney H. give a COMMENCEMENT SPEECH! :) ) http://www.mcsweeneys.net/2006/6/7michalski.html |
| Humour | Also, what do you get when you cross the Sopranos with eVite? This! http://www.mcsweeneys.net/2006/5/30lawless.html |
| Culture? | Ukulele Orchestra of Great Britain plays Nirvana's "Smells Like Teen Spirit". Entertain Us, indeed. http://video.google.com/videoplay?docid=-4559510005057780538 |
| Ecology | Not just for tree huggers with taped-up eyeglasses! http://www.ecogeek.org/ |
| Medicine | I can't attest for the medical information here, but this is a pretty impressive web site overall. http://www.insidecancer.org/ |
| India | Even hip-hop is getting outsourced to India! http://www.transbuddha.com/mediaHolder.php?id=1402 |
| India | India advances... from services to products http://news.yahoo.com/s/nm/20060527/bs_nm/column_pluggedin_dc_2 |
| Culture | Impossible (piggybacks) is nothing http://video.google.com/videoplay?docid=3089864146224588368 |
| Culture | More commercials you will never see in North America http://video.google.com/videoplay?docid=-5113434900671269426 |
| Weird/Cool | Coke: it's the real (explosive) thing! http://video.google.com/videoplay?docid=5695044769427318137 |
| Weird/Cool | Dog rides bike. Really. http://video.google.com/videoplay?docid=6742988194956129075 |
| Very Cool | How does the world feel? Go here and find out at this very very cool site. They even publish an API! http://www.wefeelfine.org/ |
| Culture | This is fascinating (to me). I got this from http://www.andrewsullivan.com. Google has a new feature called Google Trends, With it, you can compare the world's interest in your favorite topics. He uses "sex" to drive home a point that Muslim cultures that are repressive have the most searches on sex. I don't know if the data point necessarily supports THAT conclusion. But I was intrigued, so I tried different options: http://www.google.com/trends?q=sex http://www.google.com/trends?q=money http://www.google.com/trends?q=happiness and just for the heck of it http://www.google.com/trends?q=Paris+Hilton Very interesting....very different results, too! North Americans are more interested in money! The Turks have an interest in sex and Paris Hilton, but not money, while the Australians have an interest in money and Paris Hilton but not sex. LOL!!! |
| Culture | McSweeneys. Not just another hip-cool-smart periodical in paper...now on the web, too! http://www.mcsweeneys.net/ |
| Culture | You can see Tim Burton has had his ideas for some time by checking on this cool video he made in 1982, no less http://www.transbuddha.com/mediaHolder.php?id=1738 |
| Computers/ Humour | For those of you professionals wondering about going in for technical certification, I think this video makes a good case for it. NOT! http://www.transbuddha.com/mediaHolder.php?id=1725 |
| Politics/ Humour | Governing is hard work. So it pays to take a nap sometimes, especially when foreign dignitaries come to town (Cheney and Rice napping while the head of China visits. And people criticize YOU for slacking off at work. These are the leaders of the Free World! :) ) http://abcnews.go.com/US/popup?id=1871301 |
| Music | This is a cool little video. Quirky, in a good way. Check out Cake doing the classic, Guitar Man http://www.transbuddha.com/mediaHolder.php?id=1670 |
| Culture | From the Toronto Star (I Love these titles): A buoyant "teen chick lit" genre has helped boost sales of juvenile-fiction books by 20 per cent last year, compared with just 5 per cent for adult fiction, with titles including Neurotica, Dating Without Novocaine, You Are SO Not Invited to My Bat Mitzvah, From Here To Maternity and The Givenchy Code ... http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&pubid=968163964505&cid=1147039809142&call_page=TS_Business&call_pageid=968350072197&call_pagepath=Business/News |
| Culture/ Humour | Marcelo Martins sent me this site: http://songstowearpantsto.com/ There are some hilarious songs here! Andrew Pants will write a song (lyrics and melody) with any theme, rhythm you request. Check out the song about a rabbit named Poopie...be warned...you may want to listen to it with earphones on, or your coworkers may wonder: http://www.archivestowearpantsto.com/tracks/0009_rename_your_rabbit.mp3 |
| Fashion/ Silliness | Now I am not a big fan in dressing kids up this way, but the thought of an infant in a Ramones shirt was kinda cool! http://www.babesta.com/babywit/ramones.asp And what 3 mo old wouldn't look cool in a Che Guevara nappy! http://www.babesta.com/badd/che.asp There's also Emily the Strange, who I like :) http://www.babesta.com/spacebaby/iwant.asp |
| Cool Ideas | Norbert Hoeller forwarded this unique invention to me. It's hot! It's cold! It's the incredible wood burning Fridge! http://www.motherearthnews.com/library/1975_September_October/The_Incredible_Wood_Burning_Refrigerator__Is_Now_Under_Development_ |
| Culture! | The Internet FINALLY delivers real value! I give you Bugs Bunny in "Homeless Hare". By Chuck Jones. http://www.transbuddha.com/mediaHolder.php?id=1740 |
and....That's All Folks! |
Bernie show us where to sing the blues!
http://www.desktopblues.lichtlabor.ch/
Click the "Click Here", turn the radio on, then press the buttons! Instant blues! (Robert Johnson is turning over in his grave.)
After you play with it awhile, don't be surprised if people start putting "Jellyroll" in front of your name. J
Bernie TV
--From Bernie--
I came across this Transbuddha site by accident, looking for the Crazy Frog video for Sophie and Marcus. I start pulling interesting stuff off it last week, and I have basically given up, because there is alot of cool stuff there. So if you are bored of TV and you have high speed internet, go there! And since what is TV without ads, check out www.dhadm.com! LOL
(You will need high speed and audio and viewer discretion).
If you don't know Crazy Frog, you will. I saw stuff with his mug in the luggage store today. Be warrned, don't start watching this with a child...long after you find it amusing, they will still want you to replay it! Also, the little fella really should be wearing a loincloth or codpiece or something! (Not surprising, he is castrated on the luggage.)
http://transbuddha.com/mediaHolder.php?id=464
I love this! It is quite a remarkable ad. You don't need to understand German to watch it: it is visually brilliant. And NOT what you want to see at the airport.
http://www.transbuddha.com/index.php/buddha/racing_beats/
More funny Germans are here....
http://www.dhadm.com/index.php/dhadm/vw_unpimp_your_ride_sling_shot/
...and...
http://www.transbuddha.com/index.php/buddha/berlitz_sinking/
This technology ad is VERY funny. I have watched it a number of times and I still laugh. (I am simple that way.)
http://www.transbuddha.com/index.php/buddha/comments/6015/
Same goes for this one.
http://www.dhadm.com/index.php/dhadm/super_bowl_xl_sprint_theft_deterrent_feature/
This too is funny. Stupidly funny. The piling up of absurdities works.
http://www.dhadm.com/index.php/dhadm/super_bowl_xl_full_throttle_energy_drink/
This is funny, but risque instead of stupid.
http://www.dhadm.com/index.php/dhadm/super_bowl_xl_ameriquest_airline/
And "birds" are funny!
http://www.dhadm.com/index.php/dhadm/windex_birds/
And even Old Spice can be funny!!
hhttp://www.dhadm.com/index.php/dhadm/old_spice_red_zone_clear_gel/
So that was the funny stuff. This is REALLY disgusting. You have been warned!!!
http://www.dhadm.com/index.php/dhadm/ipecac_500/
And well George Bush is in a league by himself....
http://www.dhadm.com/index.php/dhadm/bush_blunders_abound/
Some great URLs from Bernie, part 1
| Design | The sublime: Shopping and sustainability combined here: http://www.branchhome.com/ Even cooler -- to me -- there is a guy there named Daniel Michalik designing neat stuff. LOL! http://www.branchhome.com/index.php?main_page=index&manufacturers_id=1 |
| Culture, sorta :) | From the sublime to...: This is ridiculous on so many levels. So naturally, I had to send it on! http://www.pimpmysnack.com |
Entertainment | If you have seen everything at Blockbuster and want something very different, check out http://www.singularfilms.com They have a very fun selection, as well as "M", one of my favourite films: http://www.singularfilms.com/singular/scripts/prodView.asp?idProduct=110 Also, "The Brain that Wouldn't Die" (I mean, who wouldn't want to watch THAT?! :) ) http://www.singularfilms.com/singular/scripts/prodView.asp?idproduct=97 |
Wine / Cool Stuff | This has a very cool interface. Very un-Web 2.0! :) For lovers of books and/or wine. It is cool. http://www.caduceus.org/ |
More Cool stuff | And this IS very web 2.0 both in the design and the idea. I like converting digital photos into working PDFs. Check it out: http://www.scanr.com/ |
More "Culture" | Definitely a list one does not want to appear on, though Brad Pitt is on it, so what's the deal there? http://us.cnn.com/2006/SHOWBIZ/TV/04/19/people.unsexy.reut/index.html |
Stuff for Kids | This is a phenomenal thing for kids. It is not for "adults". It is for "children". http://www.palaisdetokyo.com/fr/tokyogames/game1/opniyama.html Kids will also like this, too http://www.tokyoplastic.com/ |
Music/Virtuosity | To me, this is truly alternative. Good alternative. The first link is to a truly virtuoso ukelele player. Yes, that instrument. Check it out...it is really worthwhile. As for the second link, I have watched in a number of times. It is interesting on alot of levels: nice use of animation and live footage, very unique music style, good guitar playing, nice vocals, and lovely tempo changes during the chorus. :) http://www.transbuddha.com/index.php/buddha/while-my-guitar-ukulele-gently-weeps/ http://www.transbuddha.com/index.php/buddha/matisyahu_king_without_a_crown/ |
Pink - Stupid Girls
http://www.transbuddha.com/mediaHolder.php?id=1612
In-flight announcements are not entirely truthful. What might an honest one sound like?
http://www.economist.com/research/articlesBySubject/PrinterFriendly.cfm?Story_ID=7884654&subjectID=348873
Fear of flying
Welcome aboard
Sep 7th 2006
From The Economist print edition
In-flight announcements are not entirely truthful. What might an honest one sound like?
| |
“GOOD morning, ladies and gentlemen. We are delighted to welcome you aboard Veritas Airways, the airline that tells it like it is. Please ensure that your seat belt is fastened, your seat back is upright and your tray-table is stowed. At Veritas Airways, your safety is our first priority. Actually, that is not quite true: if it were, our seats would be rear-facing, like those in military aircraft, since they are safer in the event of an emergency landing. But then hardly anybody would buy our tickets and we would go bust.
The flight attendants are now pointing out the emergency exits. This is the part of the announcement that you might want to pay attention to. So stop your sudoku for a minute and listen: knowing in advance where the exits are makes a dramatic difference to your chances of survival if we have to evacuate the aircraft. Also, please keep your seat belt fastened when seated, even if the seat-belt light is not illuminated. This is to protect you from the risk of clear-air turbulence, a rare but extremely nasty form of disturbance that can cause severe injury. Imagine the heavy food trolleys jumping into the air and bashing into the overhead lockers, and you will have some idea of how nasty it can be. We don't want to scare you. Still, keep that seat belt fastened all the same.
Your life-jacket can be found under your seat, but please do not remove it now. In fact, do not bother to look for it at all. In the event of a landing on water, an unprecedented miracle will have occurred, because in the history of aviation the number of wide-bodied aircraft that have made successful landings on water is zero. This aircraft is equipped with inflatable slides that detach to form life rafts, not that it makes any difference. Please remove high-heeled shoes before using the slides. We might as well add that space helmets and anti-gravity belts should also be removed, since even to mention the use of the slides as rafts is to enter the realm of science fiction.
Please switch off all mobile phones, since they can interfere with the aircraft's navigation systems. At least, that's what you've always been told. The real reason to switch them off is because they interfere with mobile networks on the ground, but somehow that doesn't sound quite so good. On most flights a few mobile phones are left on by mistake, so if they were really dangerous we would not allow them on board at all, if you think about it. We will have to come clean about this next year, when we introduce in-flight calling across the Veritas fleet. At that point the prospect of taking a cut of the sky-high calling charges will miraculously cause our safety concerns about mobile phones to evaporate.
On channel 11 of our in-flight entertainment system you will find a video consisting of abstract imagery and a new-age soundtrack, with a voice-over explaining some exercises you can do to reduce the risk of deep-vein thrombosis. We are aware that this video is tedious, but it is not meant to be fun. It is meant to limit our liability in the event of lawsuits.
Once we have reached cruising altitude you will be offered a light meal and a choice of beverages—a word that sounds so much better than just saying ‘drinks’, don't you think? The purpose of these refreshments is partly to keep you in your seats where you cannot do yourselves or anyone else any harm. Please consume alcohol in moderate quantities so that you become mildly sedated but not rowdy. That said, we can always turn the cabin air-quality down a notch or two to help ensure that you are sufficiently drowsy.
After take-off, the most dangerous part of the flight, the captain will say a few words that will either be so quiet that you will not be able to hear them, or so loud that they could wake the dead. So please sit back, relax and enjoy the flight. We appreciate that you have a choice of airlines and we thank you for choosing Veritas, a member of an incomprehensible alliance of obscure foreign outfits, most of which you have never heard of. Cabin crew, please make sure we have remembered to close the doors. Sorry, I mean: ‘Doors to automatic and cross-check’. Thank you for flying Veritas.”
Welcome aboard
Sep 7th 2006
From The Economist print edition
In-flight announcements are not entirely truthful. What might an honest one sound like?
| |
“GOOD morning, ladies and gentlemen. We are delighted to welcome you aboard Veritas Airways, the airline that tells it like it is. Please ensure that your seat belt is fastened, your seat back is upright and your tray-table is stowed. At Veritas Airways, your safety is our first priority. Actually, that is not quite true: if it were, our seats would be rear-facing, like those in military aircraft, since they are safer in the event of an emergency landing. But then hardly anybody would buy our tickets and we would go bust.
The flight attendants are now pointing out the emergency exits. This is the part of the announcement that you might want to pay attention to. So stop your sudoku for a minute and listen: knowing in advance where the exits are makes a dramatic difference to your chances of survival if we have to evacuate the aircraft. Also, please keep your seat belt fastened when seated, even if the seat-belt light is not illuminated. This is to protect you from the risk of clear-air turbulence, a rare but extremely nasty form of disturbance that can cause severe injury. Imagine the heavy food trolleys jumping into the air and bashing into the overhead lockers, and you will have some idea of how nasty it can be. We don't want to scare you. Still, keep that seat belt fastened all the same.
Your life-jacket can be found under your seat, but please do not remove it now. In fact, do not bother to look for it at all. In the event of a landing on water, an unprecedented miracle will have occurred, because in the history of aviation the number of wide-bodied aircraft that have made successful landings on water is zero. This aircraft is equipped with inflatable slides that detach to form life rafts, not that it makes any difference. Please remove high-heeled shoes before using the slides. We might as well add that space helmets and anti-gravity belts should also be removed, since even to mention the use of the slides as rafts is to enter the realm of science fiction.
Please switch off all mobile phones, since they can interfere with the aircraft's navigation systems. At least, that's what you've always been told. The real reason to switch them off is because they interfere with mobile networks on the ground, but somehow that doesn't sound quite so good. On most flights a few mobile phones are left on by mistake, so if they were really dangerous we would not allow them on board at all, if you think about it. We will have to come clean about this next year, when we introduce in-flight calling across the Veritas fleet. At that point the prospect of taking a cut of the sky-high calling charges will miraculously cause our safety concerns about mobile phones to evaporate.
On channel 11 of our in-flight entertainment system you will find a video consisting of abstract imagery and a new-age soundtrack, with a voice-over explaining some exercises you can do to reduce the risk of deep-vein thrombosis. We are aware that this video is tedious, but it is not meant to be fun. It is meant to limit our liability in the event of lawsuits.
Once we have reached cruising altitude you will be offered a light meal and a choice of beverages—a word that sounds so much better than just saying ‘drinks’, don't you think? The purpose of these refreshments is partly to keep you in your seats where you cannot do yourselves or anyone else any harm. Please consume alcohol in moderate quantities so that you become mildly sedated but not rowdy. That said, we can always turn the cabin air-quality down a notch or two to help ensure that you are sufficiently drowsy.
After take-off, the most dangerous part of the flight, the captain will say a few words that will either be so quiet that you will not be able to hear them, or so loud that they could wake the dead. So please sit back, relax and enjoy the flight. We appreciate that you have a choice of airlines and we thank you for choosing Veritas, a member of an incomprehensible alliance of obscure foreign outfits, most of which you have never heard of. Cabin crew, please make sure we have remembered to close the doors. Sorry, I mean: ‘Doors to automatic and cross-check’. Thank you for flying Veritas.”
8.9.06
Disney drops Pix Micro, Click and Max kiddie-cams - Engadget: "Disney drops Pix Micro, Click and Max kiddie-cams
Posted Sep 8th 2006 12:58PM by Paul Miller
Filed under: Digital Cameras
It's not exactly a technological tour de force, but Disney's new lineup of heavily branded digital cameras should hit their target market -- the wallets of pampered children's parents -- quite nicely. Starting off the branding extravaganza is the $20 Pix Micro cam (pictured), which shoots 352 x 240 pics and runs on a single AAA battery. A tad more exciting is the $50 Pix Click camera, which has a 1-inch color LCD, storage for 200 VGA pics, a built-in flash, TV output and 2 interchangable faceplates -- which of course prominently feature exciting Disney properties like our personal fav: 'High School Musical.' The $80 Disney Pix Max really pushes things to the limit, featuring a 3 megapixel CCD, 1.5-inch color LCD, expandable memory, TV-out and a flash. Finally, we have the Disney Princess Digital Movie Maker, which goes for $80 and includes 32MB of built-in memory for shooting VGA princess flicks -- Princess not included.
Read - Disney Pix Micro
Read - Disney Pix Click
Read - Disney Pix Max"
Expressing Motion in Photography - PictureCorrect Tips and Lessons: "Expressions of Motion in Photography
There are many situations in the world of photography where you will have to decide how you want to capture a moving subject. Whether it is an athlete running down the field or a bird swooping over the water there are many different photo outcomes possible. You could end up with everything in the scene perfectly displayed without any blur or you could end up with the subject in focus while the background is blurred from panning. In this article we will discuss the different techniques you could use in order to end up with different results.
Freezing the Motion
If you would like to freeze the motion of the subject along with the motion of the background, you should use a very high shutter speed. I would use a shutter speed of at least 1/300th of a second in order to make sure that you freeze everything. But there are other subjects you might find that will be moving unusually fast such as cars or thrown objects. If you would like to freeze a faster moving object you will probably need to use a shutter speed closer to 1/1000th of a second or faster. This shouldn't be a problem now because the new cameras are coming out with shutter speeds of up to 1/8000th of a second.
... rest of the article at the original site
6.9.06
Quelle television superbe...
gizmag Article: Samsung releases innovative LED LCD TV
5.9.06
Toujours de nouvelles façons de faire du café... voici un Bodum qui n'en est pas un:
gizmag Article: The AeroPress Coffee Machine: a new concept in an ancient art
30.8.06
Big Dog Walking 4-Legged Tank/Mule
| Even more signs of the Evil Robot Overloards/Apocalypse: A nimble, four-legged robot is so surefooted it can recover its balance even after being given a hefty kick. The machine, which moves like a cross between a goat and a pantomime horse, is being developed as a robotic pack mule for the US military. BigDog is described by its developers Boston Dynamics as “the most advanced quadruped robot on Earthâ€. Raibert says the latest version of BigDog can handle slopes of 35° – a steeper gradient than one in two. The hydraulics are driven by a two-stroke single-cylinder petrol engine, and it can carry over 40 kg, about 30% of its bodyweight. The robot can follow a simple path on its own, or can be remotely controlled. The legs on the next version of BigDog, V3, will each have an additional powered joint and will be able to take on even steeper slopes and rougher terrain at higher speed, its makers say. <i>Thanks to NewsScientist.com for the description [edited] </i> | |
4.8.06
Software and Web Development Blog
http://techsearch.cmp.com/blog/archives/2006/07/home_smart_home.html
Software and Web Development Blog
Max Fomitchev Keeps You Up To Date
Home, Smart Home
The idea of smart home is steadily gaining popularity. Technologically it has been possible to construct a smart home for a long time yet really smart software with useful feature set software for controlling the operation of such premises is yet to come.
Now, what can we automate in a smart home? We can automate all the things that we do manually and turn our home in a personal secretary and butler via omnipresent sensors and internet-aware appliances. So let's dream!
Firstly, a smart home must start outdoors. When you approach your smart home in a vehicle the home should recognize your approach (e.g. via pressure sensors in driveway), read the RFID signature of your car to authenticate the vehicle and open the garage doors for you. Similarly, when you pullout the garage doors should close automatically (unless especially directed otherwise).
Similarly, when the owner enters the home through the front door the home must recognize the owner (either via RFID key or by reading fingerprints through the doorknob) and let the owner in.
Other outdoor functions may include keeping track of precipitation and outdoor temperature for initiating sprinkler system on dry days as well as scheduling automatic lawn mowers to groom the lawn.
Indoors the most useful feature would be to keep track of residents' location (e.g. via pressure sensors or RFID technology) and turn on the lights automatically when the ambient light is insufficient or when one enters a bathroom or closet. Another reason for keeping track of resident’s location is communication: each room can be equipped with speakers and microphone such that residents could communicate with each other and with the home’s control system and the software should be smart enough to activate speakers and microphones using the resident’s location information.
Appliances should loose confusing controls and become autonomous and voice activated, e.g. a washing machine must come on automatically when it is full and should pick a washing cycle appropriate to its load (e.g. heavier for fry pans, lighter for classes). The same rule applies to washer and dryer. The appliances may also inform the owner via the smart-home interface and the speaker system about pending activities such as the need to dry the washed laundry, or a necessity to add detergent or to replace the filter. The notifications, however, should be convenient and in no way annoying.
Lastly, the home’s central computer should also serve as an entertainment center by hosting music and video collection (as well as the cable or satellite hook-up) instantly available for enjoyment. Another useful feature would be the integration of the phone and the email system with the home’s software such that the resident could receive voice notifications of the important phone calls or emails instantaneously in its current location with the ability to respond interactively to the voice calls.
Furthermore the home’s speaker system should be able to receive commands to control the smart appliances, e.g. the home’s resident from a bedroom should be able to direct the coffee maker in the kitchen to make fresh coffee.
The smart home can also take care of the chores by scheduling robotic vacuum cleaners at convenient times (e.g. when there is nobody home or upon voice commands) as well as dispatch store orders for refilling the refrigerator and supplies.
Safety features could include intruder detection (e.g. forced window entry) and 911 calls when the owner falls downstairs and fails to respond to status inquiry. The latter feature could be especially useful for senior residents requiring extra care. The smart home can monitor movement and life signs of such persons and call emergency or care services when the resident status is outside the normal range.
Surely I described just a tip of the iceberg of what a smart home should be. RFID technology seems to be necessary to tag supplies, food items and residents for easy recognition by the home sensor system. And the construction cost would definitely be higher due to the necessity for large quantities of pressure, RF and other sensors as well as wiring, speakers, microphones and central computer system hook ups. Yet just as air conditioning the smart home features and software will not leave our life style as soon as we get to taste it. Don’t you think?
18.7.06
Time To Take Another Look At Business Blogs
Time To Take Another Look At Business Blogs
JULY 13, 2006
To blog or not to blog? That was the question. And when it came to business blogs, most marketers felt they had the answer: "No."
"A year ago eMarketer looked at the business of blogging and said that blogs were a one-to-few medium, and they were not practical for most businesses," says James Belcher, eMarketer Senior Analyst and author of the new report, The Business of Blogging: A Review. "But over the past year many things have changed, including our opinion."
In fact, it is time for business to reconsider the question of blogging.
"Currently, despite the fact that a new blog is launched every second, very few businesses blog," says Mr. Belcher. "They have hesitated entering a medium where ceding control is one of the ground rules, and as a result, well over 90% of them, both large and small, simply don't blog."
The hurdles that corporations must overcome to blog are formidable.
"After years of meticulous branding, carefully arranged PR messages, and committee-developed corporate-speak that offends no one — especially lawyers — successful blogging requires ceding message control internally to a single, real voice, and externally to commenters whose feedback may not always be positive," says Mr. Belcher.
A growing number of businesses, however, are moving beyond the blogging-as-sales-tool mindset that hindered adoption.
"GM and Sun, notably, are blogging with a one-to-many voice that gives them one of the most low-cost PR options available," says Mr. Belcher.
At the same time, companies are learning, often the hard way, that monitoring blogs is becoming an essential part of brand management.
"A generation for whom sharing information via social networks and personal blogs is second nature will demand being addressed as human beings, without the filters applied by traditional corporate communications," says Mr. Belcher. "Marketers and PR professionals who want to remain relevant in this environment will add blogging and blogosphere literacy to their skill sets, or risk falling behind their customers."
Make certain your business is positioned to take advantage of the changes ahead, read the new eMarketer report, The Business of Blogging: A Review today.
Note created Jul 13, 2006
eMarketer.com - Time To Take Another Look At Business Blogs - www.emarketer.com/...
3.5.06
To survive, organizations must execute in the present and adapt to the future. Few of them manage to do both well.
The adaptable corporation
To survive, organizations must execute in the present and adapt to the future. Few of them manage to do both well.
Eric D. Beinhocker
2006 Number 2
Any business faces two basic demands: it must execute its current activities to survive today's challenges and adapt those activities to survive tomorrow's. Since both executing and adapting require resources, managers face an unending competition for money, people, and time to address the need to perform in the short run and the equally vital need to invest in the long run. This problem raises an important question—is it possible to do both well or is there an inevitable trade-off between executing and adapting?
Executing versus adapting
Tom Peters and Bob Waterman were among the first popular writers to draw attention to the managerial implications of this challenge, in 1982's In Search of Excellence,1 where they argued that organizations must simultaneously be "tight" in executing and "loose" in adapting. This dialectic has been a central theme in management literature ever since: James Collins and Jerry Porras, for example, note the importance of both control and creativity in Built to Last,2 Richard Foster and Sarah Kaplan examine the need to balance operating versus innovating in Creative Destruction,3 and Michael Tushman and Charles O'Reilly paint their vision of an "ambidextrous" organization that can operate as well as innovate in Winning through Innovation.4 One of the best-known and most-cited academic papers on the topic, written in 1991 by Stanford's James March, used the memorable terms "exploration" versus "exploitation."5
Each writer's language and nuances may be different, but it is no coincidence that the yin-yang theme of opposing challenges keeps cropping up. The evidence suggests that most companies are far better at the executing half of the dialectic than at the adapting half. Very few do both well.
In two major studies, published in 2002 and 2005 respectively, Robert Wiggins, of the University of Memphis, and Tim Ruefli, of the University of Texas at Austin, show that while many companies can manage short-term bursts of high performance, only a few sustain it in the longer run. The authors stratified a sample of 6,772 companies over 23 years into superior, modal (middle), and inferior performers in their industries. Only 5 percent of these companies remained in the superior stratum for 10 years or more.6
Wiggins and Ruefli concluded that the short-term performers were successful executers that lost their way when the environment shifted. All sources of competitive advantage are temporary, and very few companies can create new sources of advantage after their historic sources decline.
Taking another angle on the problem, Foster and Kaplan point out (in Creative Destruction) that only a very small population of companies has endured for a very long time: for example, of the original Forbes 100 companies, in 1917, only 13 have survived independently to the present day. These companies must in some sense be highly adaptable, having endured the Depression, World War II, globalization, and enormous changes in markets and technologies. Yet as the authors observe, the long-term survivors, with the exception of GE, have been mediocre to poor performers relative to their industries and the overall market.
We thus have, on the one side, high-performing executers that can't sustain their performance and, on the other, long-term adapters that don't perform well. Companies that can both execute and adapt are very rare indeed. Wiggins and Ruefli found that fewer than 0.5 percent of the companies in their sample stayed in the top stratum for more than 20 years. Only three companies—American Home Products, Eli Lilly, and 3M, or 0.04 percent of the whole—made it to the 50-year mark. (This sample didn't include multibusiness companies, such as GE.)
Why is adapting and performing well so hard? The answer is that the demands of execution create deep barriers to adaptability, and these barriers afflict every organization. Overcoming them requires a fundamental rethinking of what GE's Jack Welch calls an organization's "social architecture"—the combination of individual behavior, structure, and culture—which shapes long-term performance.
Barriers to adaptability
Any organization faces many potential barriers to adaptability, some specific to itself. We will focus, however, on three that are deeply rooted in the nature of organizations and thus widely shared.
People: The price of experience
Much has been written about recent research in behavioral economics showing that managers and other decision makers are not as perfectly rational as traditional economic theory assumes.7 This research tends to focus on common biases and errors, which affect the quality of decision making. Such biases can undermine adaptability; the well-studied bias of overoptimism, for example, can make organizational-change efforts seem less urgent.8 What is less well known is that behavioral research also offers insights into why people become set in their ways and have difficulty adapting to change.
We've all had the experience of arguing with people and believing that the evidence for our position is crystal clear, though the other person "just doesn't get it." Why is it that people sometimes "just don't get it," even in the face of overwhelming evidence?
Mental models become more rigid, more locked in, and more averse to novelty as we gain experience
The answer may lie in the way we learn and categorize information in our mental models.9 Many cognitive scientists believe that one important way people learn involves condition-action (or if-then) rules. A child might, for example, learn that, "If the stove is hot, then don't touch." Through experience, we accumulate a storehouse of such rules. Our environment gives us feedback about which do and don't work. Over time we tend to give more weight to those that have worked in the past. Mental models also organize rules into complex hierarchies and webs of relationships. A child, for example, might have a hierarchy of rules related to hot things, with a general rule—"don't touch"—as well as subcategories of specific forms of behavior for ovens, radiators, food, bathwater, and the like.
This set-up of rules, weightings, and hierarchies has tremendous benefits. It enables us to learn from experience, to make decisions using ambiguous information, and to make inferences across experiences. (A child might, for example, categorize a radiator as like an oven; both are hot and not to be touched.) But the downside is that our mental models tend to become more rigid, more locked in, and more averse to novelty as we gain experience.
When we are young and inexperienced, our hierarchies of rules are fairly shallow, so our views of the world are relatively general. This way of thinking has advantages and disadvantages. The advantage is that such mental models are easy to change: new experiences are readily absorbed, and reorganizing the hierarchy of rules isn't very difficult, because there isn't much to reorganize. The disadvantage is that we are less likely to respond correctly in unfamiliar situations. Hence the stereotype that young people are more adaptable but also more likely to behave inappropriately.
As we gain experience, our rule hierarchies fill up and the situation reverses: we have a larger collection of specific experiences and more feedback on what has and hasn't worked. Our mental models grow into complex structures of categories, interlinked rules, and weightings. We become less likely to perceive experiences as totally new and instead try to relate them to previous ones, which we group into existing categories. Once in a while, we encounter something outside our experience and must then create a new category or rearrange an existing one. As mental models become more complex over time, major rearrangements become more difficult. Reorganizing an older, more experienced mental model resembles reorganizing General Motors, whereas reorganizing a younger, less experienced model is more like reorganizing a start-up. Mental models tend to settle over time, and bigger and bigger shocks are needed to shake them up.
This is not an ageist argument; certainly there are 20-year-old fuddy-duddies and adaptable people of 70. But in broad terms, the structures of mental models change over time, and each stage of development has its strengths and weaknesses.
The implications for organizational adaptability are critical. Companies tend to be organized as hierarchies, with the most experienced, successful people on top. This arrangement presents a trade-off: the mental models at the top are usually among the best for execution in a stable environment. These executives have extensive experience and a large storehouse of specific responses that are quite likely to be appropriate.
Yet when the environment changes significantly, such individuals may have difficulty recognizing the change and then, once they do, may draw too heavily on what has worked in the past. This kind of inertia helps to explain the hero-rogue syndrome: a CEO executes successfully in one environment, is lauded by the press and investors, and then falls off a cliff when the environment changes. It also helps to explain why many turnarounds involve wholesale changes in top management: it is often easier and faster to change which people occupy the executive suite than to change their mental models.
Structure: The risk of complexity catastrophes
Organizations can be viewed as a form of network in which webs of people interact. A very general phenomenon in networks, called a complexity catastrophe, helps explain why large organizations often find it harder than small ones to adapt.10
The idea is simple. In any network with more than one connection per node, as the number of nodes grows, the number of connections or interdependencies grows even faster. (A three-node network where everything is connected to everything else has three connections, for instance, but a four-node network has six.) The more interdependencies, the more potential for conflicts that constrain the range of solutions. Getting three friends to agree on where to meet for dinner might be easy, for example, but getting six friends to agree is much more difficult because one, say, likes meat, another is a vegetarian, yet another has to stay near home, and so on. Conflicting constraints make change difficult because a positive change in one part of the network can ripple through and have a negative impact somewhere else. Highly interdependent systems, such as large software programs, jet engine designs, and international trade agreements, can sometimes become so complex that they go into gridlock and change becomes impossible. That is a complexity catastrophe.
Highly interdependent systems can sometimes become so complicated that they go into gridlock and change becomes impossible
An example of a complexity catastrophe in the business world was Dell's assault on the PC industry in the 1980s and '90s. In 1984 a 19-year-old Michael Dell, using $1,000 raised by selling his stamp collection, started a company that 13 years later eclipsed IBM, Compaq, HP, Fujitsu, and other corporate giants to become the world's leading seller of PCs. A natural question is, if Dell's low- cost, customer-friendly business model was so successful, why didn't any of these larger, better-resourced competitors imitate it? Companies can often succeed in changing one dimension of their business model, but simultaneously changing multiple dimensions inevitably leads to conflicting constraints. In order for the incumbents to move to a direct sales model for consumers they would have had to manage conflicts with their existing retail channels, for example, as well as simultaneously change their manufacturing and logistics systems and brand positioning. As a start-up, Dell had more degrees of freedom than the established players, making it easier for it to create a new business model than for the incumbents to adapt theirs.
As an organization's size and complexity grow, its degrees of freedom drop. Yet size and complexity are just what execution demands. Scott Page, of the University of Michigan, has studied why some organizations are complex and hierarchical while others are simple and flat. He concludes that organizations evolve in response to the problems they have to solve. Complex problems that must be divided into lots of chunks and then carefully sequenced and coordinated require deep hierarchical organizations with many managers and traffic cops. Simpler tasks can be solved by simpler, flatter organizations.11 The execution tasks of most large companies tend to be quite complicated, whether the challenge is getting oil from remote parts of the world into the cars of millions of consumers or coordinating risks in a global bank. This complexity of execution inevitably leads to interdependencies and organizational complexity, which in turn create the potential for gridlock: a complexity catastrophe.
Resources: The path to dependence
In 1959, long before the idea of a tension between exploration and exploitation became popular in management circles, Edith Penrose, an economist at the London School of Economics, published a slim but influential volume: The Theory of the Growth of the Firm.12 Penrose viewed this growth as a process of search and exploration. Management teams seek out new opportunities in the environment and then use corporate resources to exploit them.
By resources, Penrose primarily meant physical assets and talent, but modern theorists have extended her definition to include less tangible but equally important resources, such as knowledge, brands, reputations, and relationships. In short, resources are whatever management uses to exploit opportunities.
This theory has two implications. First, the particular opportunities that management wants to exploit determine a company's resources. A team that sees opportunities in nanotechnology, for example, will find the relevant researchers and machines and then attempt to build a brand and a reputation for expertise in that field.
The flip side is that a company's resources define and limit its ability to explore. Say that a management team is running a fish-processing plant and the CEO wakes up one day enamored of nanotechnology. The opportunity may exist, but the company's resources (canning machines, its workers' skill at filleting fish, and a brand such as Taste o' the Sea) confine its real opportunities to fish processing.
According to Penrose, management's job is to search for profitable business plans. Naturally, the search is limited to plans the managers believe they can execute. The organization's resources determine what those plans will be. But in executing a plan, management changes a company's configuration of resources. As the company hires people, invests in assets, and so on to execute its current plan, those actions define its future opportunities. A coevolutionary loop thus links the resources a company employs to execute today with the business plans of tomorrow.
Another important barrier to innovation is the coevolution of plans and resources, which creates what researchers call "path dependence" in the structure of organizations. In other words, history matters because decisions that helped companies execute in the past constrain their ability to adapt in the future. A company therefore might be stuck with the wrong resources to go in a given direction because reconfiguring them would take too much time and money.
Creating an adaptive social architecture
Thus three critical and widespread barriers to adaptability are a lack of flexibility in individual mental models, complexity catastrophes, and path dependence in resources. Overcoming these barriers isn't easy—if it were, far more than 0.5 percent of all companies would perform well over many decades. But by understanding the nature of the barriers, we can begin to address them.
Companies have two ways of overcoming these barriers. One is what Jack Welch called the "hardware" of an organization (its structure and processes), the other the "software" (norms and culture). The two sides must be consistent and mutually reinforcing to create a coherent social architecture.
Organizational hardware
The hardware fixes for the adaptability problem, though challenging, are in many ways the easier ones. Companies can use three key approaches:
- Reduce hierarchy.
- Increase autonomy.
- Encourage diversity.
Achieving this kind of shift requires changes not only in the organizational chart but also in important processes. Human resources (HR), for example, must support diverse mental models through hiring, training, and career paths. Likewise, strategic planning must support experimentation, and budgeting must promote appropriate trade-offs between efficiency and flexibility.13
In the 1990s, many organizations went down this path, chopping out layers of hierarchy and giving business units more autonomy. For some companies, these moves brought greater adaptability, but for many they created execution and control problems that forced the corporate center to reassert itself and often negated gains in adaptability. Why? Because hardware is only half of the story; an adaptable social architecture also requires critical changes to organizational software.
Organizational software
Flatness, autonomy, and diversity are diametrically opposed to the control, coordination, and consistency that successful execution requires. But the software of norms and culture can help organizations have their adaptive cake and execute it too.
An organization's norms are "should" or "ought" statements about what it regards as the right, appropriate, or expected thing to do in a given situation. Taken together, norms create an organizational culture. Just as Tolstoy famously said, "All happy families resemble one another, but each unhappy family is unhappy in its own way," the norms of companies that are both high performing and adaptive have a family resemblance. These norms fall into three categories:
- Cooperating norms. One of the key roles of a hierarchy is to enforce cooperation among individuals—in particular, to ensure that people coordinate tasks and share information. Norms that encourage trust, reciprocity, and shared purpose can achieve the same effect, but in a more flexible way.
- Performing norms. One of the arguments against increased autonomy is the diminution of senior management's centralized control over performance. Companies can counter this problem by instilling norms that create strong expectations for individual performance, so that employees will go the extra mile, take the initiative, be honest and transparent, and believe that success will be rewarded.
- Innovating norms. Structures and processes that support experimentation and diversity must have norms to back them up. Vital innovating norms include the belief that facts matter more than hierarchy, that good ideas can come from anywhere, and (to borrow a phrase from Jim Collins and Jerry Porras) that "good enough never is."
An example will help to illustrate how the hardware and software sides of a business can work together to overcome the barriers to adaptability. Imagine a company called Explore & Exploit (E&E) Incorporated, which has a flat organizational structure of highly autonomous business units and minimal hierarchy within them. In addition, the organization has an innovating norm—"speak truth to power"—that encourages younger, more junior people to challenge senior colleagues by pointing to facts. This combination of structure and norms counters mental-model lock-in. In addition, E&E's HR policies encourage practices such as hiring people from a variety of backgrounds and rotating employees through businesses and experiences, thereby creating a natural diversity of mental models.
The autonomy of the units means that the organization has relatively few interdependencies. Changes and innovative ideas don't require approval from many parts of the organization, so there is less potential for complexity catastrophes. At other companies, the result might be fiefs and a lack of cooperation, but at E&E a deeply embedded "one-company" norm and a shared sense of purpose counteract this tendency. Furthermore, high expectations for individual performance, a competitive spirit among units, and a culture of accountability (backed by appropriate HR and budgeting systems) enable senior executives to manage near-term performance without centralizing control.
Finally, E&E's strategy process encourages the creation of "portfolios of initiatives": experiments in medium- and long-term growth opportunities.14 The processes that support experimentation are backed by an innovating norm to "fail small and succeed big." One important benefit is that not all of E&E's resources address the near-term demands of the business; the company can array a diverse base of talent, assets, partnerships, and other resources to exploit growth opportunities and hedge against shifts in the environment. E&E manages the cost implications of this approach by requiring its units not only to maintain vibrant portfolios of initiatives but also to be cost competitive with their industry peers. This pressure drives innovation in near-term execution as well as long-term adaptation.
Of course, E&E's management still faces difficult trade-offs between the near-term benefits of scale, greater coordination, and more centralized control, on the one hand, and the long-term risks of mental-model lock-in, complexity catastrophes, and resource stagnation, on the other. The company's intense performance culture tends to drive the organization to execute well in the near term, so senior managers see their job as tilting the bias back toward long-term adaptability, without sacrificing performance. They also realize that the deeply embedded cultural norms of E&E explain its ability to perform this double act—if the norms were just slogans on the wall, both adaptability and execution would suffer. The CEO and top team thus invest substantial time in propagating and reinforcing the norms.
Executing and adapting appear to be irreconcilable opposites, and the empirical data suggest that most companies are destined to favor the former over the latter. But understanding the sources of this schism can help us to see the outlines of a potential solution. By creating a social architecture that marries a flexible structure to a cooperative, performance-driven, and innovative culture, companies can begin to overcome the problems that keep organizations from adapting to an ever-changing environment.
About the Authors
Eric Beinhocker, who is based in London, serves as an adviser to McKinsey. This article is adapted from his book The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics, to be published on June 1, 2006, by Harvard Business School Press (North America) and Random House (the United Kingdom and the Commonwealth).
Notes
1Thomas J. Peters and Robert H. Waterman Jr., In Search of Excellence: Lessons from America's Best Run Companies, New York: HarperBusiness, 2004.
2James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies, New York: HarperCollins, 1997.
3Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—And How to Successfully Transform Them, New York: Currency, 2001.
4Michael L. Tushman and Charles A. O'Reilly III, Winning through Innovation: A Practical Guide to Leading Organizational Change and Renewal, revised edition, Boston: Harvard Business School Press, 2002.
5James G. March, "Exploration and exploitation in organizational learning," Organization Science, 1991, Volume 2, Number 1, pp. 71-87.
6Robert R. Wiggins and Timothy W. Ruefli, "Sustained competitive advantage: Temporal dynamics and the incidence and persistence of superior economic performance," Organization Science, 2002, Volume 13, Number 1, pp. 81-105; and Wiggins and Ruefli, "Schumpeter's ghost: Is hypercompetition making the best of times shorter?" Strategic Management Journal, 2005, Volume 26, Number 10, pp. 887-911.
7Charles Roxburgh, "Hidden flaws in strategy," The McKinsey Quarterly, 2003 Number 2, pp. 26-39.
8Dan Lovallo and Daniel Kahneman, "Delusions of success: How optimism undermines executives' decisions," Harvard Business Review, July 2003, Volume 81, Number 7, pp. 56-63.
9John H. Holland, Keith J. Holyoak, Richard E. Nisbett, and Paul R. Thagard, Induction: Processes of Inference, Learning, and Discovery, Cambridge, MA: MIT Press, 1986.
10Stuart Kauffman, At Home in the Universe: The Search for the Laws of Self-Organization and Complexity, New York: Oxford University Press, 1995.
11Scott E. Page, "Two measures of difficulty," Economic Theory, 1996, Volume 8, Issue 2, pp. 321-46.
12Edith Penrose, The Theory of the Growth of the Firm, revised edition, Oxford: Oxford University Press, 1995.
13Eric D. Beinhocker, "On the origin of strategies," The McKinsey Quarterly, 2000 strategy anthology: On strategy, pp. 167-76; and Eric D. Beinhocker and Sarah Kaplan, "Tired of strategic planning?" The McKinsey Quarterly, 2002 special edition: Risk and resilience, pp. 48-57.
14Lowell L. Bryan, "Just-in-time strategy for a turbulent world," The McKinsey Quarterly, 2002 special edition: Risk and resilience, pp. 16-27.
1.2.06
Is standardization helping to drive corporate mergers?
Is standardization helping to drive corporate mergers?
Finding a “hook up” in the corporate speed-dating scene may be easier when everyone’s platforms are compatible
By David L. Margulius
January 27, 2006
It’s mating season again in the corporate world (come to think of it, when is it ever not?). Pixar and Disney are dancing the tango, Verizon and SBC have just gobbled up MCI and AT&T, and Guidant is in the final throes of being torn between two lovers -- Boston Scientific and Johnson & Johnson.
In the IT world, we take big-vendor mergers for granted, and sometimes they even make sense. Small companies are good at delivering innovation, but their innovations are often easier to consume as part of a larger package.
But outside of IT, mergers are less straightforward, causing years of integration pain, dislocation, and distraction. And when that’s over, the acquirers often change their mind and decide to spin off those divisions they bought and so painfully munged together.
Now IDC is out with its 2006 predictions, and right up top is a fascinating statement: “In 2005, the shift to more modular, efficient, and business-responsive IT drove dozens of mergers and acquisitions.” I think IDC was referring to vendor community mergers (Oracle-Siebel, for example) but they might as well have been talking about the corporate world, too.
Here’s my thesis: As IT standardizes, the corporate world becomes more like one big Lego set, more plug and play, quicker to build and disassemble. If both companies are on .NET, Java and plain vanilla SAP, or if they’re using SOA, ITIL, or hosted services, it’s a whole lot cheaper and quicker to integrate them (or untangle if need be) than it was when they were all running custom environments on legacy systems.
If you buy this vision of SOA, etc. as recombinant DNA, it means that going forward, we should expect a lot more hook-ups and breakups in the corporate world, and IT shops are in for an even wilder ride. Let the corporate speed dating begin ...
Bring on the Disrupters. Among the other interesting predictions from IDC is the acceleration of “disruptive” innovation and delivery models in 2006. In a slower-growth IT environment, IDC argues, vendors and customers alike will be forced to think more aggressively outside the bun.
We’ll be confronted with “Open Innovation”, for example, a term that University of California, Berkeley, professor Henry Chesbrough coined, which basically means hard-to-predict innovation coming from non-traditional sources. IT innovation in 2006 may be driven by community-based projects like open source, IDC says, or even by Google.
“Google is the poster child for many, many disruptive visions of what the future will look like in software delivery, content aggregation, advertising, wireless communications, and possibly services like banking, travel, or online auctions,” IDC rhapsodizes.
And finally, the disruptive concept of “IT Inside” will continue to gain momentum, according to the report. The phrase refers to the Fedexes and Hewitt Associates of the world, essentially large BPO companies wrapping a business or consumer service, such as package delivery or benefits management, around a technology core. These are the new OEM’s, IDC claims, and more and more IT dollars will flow through them rather than directly to IT vendors.
I do think IDC is on to something here. Although, as Bill Gates once noted, people tend to seriously overestimate what can happen in a year, and seriously underestimate what can happen in 10 years. I personally will try to be more disruptive this year.
19.1.06
7 Innovation Myths
(Forwarded on from Ian Adair)
http://www.mohansawhney.com/registered/content/TradeArticle/Seven%20Innovation%20Myths.pdf
These guys are from Kellog School of Management
The 7 myths are:
1. Myth - you need more new ideas
Reality - you need more homes for ideas
Managers often lament the paucity of ideas - their logic: "Ideas are like frogs eggs - thousands are hatched but only a few hatch". The logic is flawed - you don't need more frogs eggs....you need more egg incubators!
2. Myth - Innovation is a department
Reality - Innovation is Company wide competency
3. Myth - Let people loose to innovate
Reality - Enable Innovation through structure and process
Ideas are often serendipitous, Innovation is not. Give employees the freedom to imagine and the structure to act.
Here is an interesting insight - you combat structure with structure
4. Myth - Innovation is a radical departure from the past
Reality - Innovation often creatively combines pieces of the past
5. Myth - Mistakes are costly
Reality - Early mistakes are profitable
Equating project cancellation with failure is one of the most dysfunctional characteristics of many organisations.
Mistakes are the handmaidens of success.
As Wayne Gretsky (ice hockey champion) said - you miss 100% of the shots you dont take
Make mistakes cheaply and make them early in the game.
6. Myth - Avoid the detours
Reality - Detours may be the destination
Microwaves were developed for military applications but ended up warming our food
Who would have thought ring tones (developed as a gimmick) would have grown to a $3.5b business in 2003
7. Myth - Innovation is about creating new things
Reality - There are many paths to Innovation
Innovation can take many forms. Starbucks did not invent coffee
Dell's computers are that different from competitors
17.9.05
Programmers are combining data from different websites to create“mash-up” sites with entirely new capabilities
Mashing the web
Sep 15th 2005
From The Economist print edition
Software: Programmers are combining data from different websites to create “mash-up” sites with entirely new capabilities
ARMED with a stack of house-listing printouts from Craigslist.com, a popular website, Paul Rademacher was driving around Silicon Valley late last year looking for a place to live. It was not until he was about to park that he looked up and realised he had already visited the same house earlier. Surely, he thought, there had to be a better way to evaluate and visualise a list of housing options.
And so there was. In February, Mr Rademacher—who by day was a software engineer at DreamWorks Animation—began building a website that combines the mapping capabilities of Google's search engine with housing listings from Craigslist. The result, HousingMaps.com, creates maps showing houses or apartments in a particular city within a designated price range. The site went live in April, and is a leading example of one of the latest internet trends: the web mash-up. HousingMaps instantly attracted a crowd and has since been visited by more than 850,000 people.
The term mash-up is borrowed from the world of music, where it refers to the unauthorised combination of the vocal from one song with the musical backing of another, usually from a completely different genre. Web mash-ups do the same sort of thing, combining websites to produce useful hybrid sites and illustrating the internet's underlying philosophy: that open standards allow and promote unexpected forms of innovation.
“Mash-ups are emblematic of the direction of the web,” says Paul Levine, the general manager of Yahoo! Local, a subsidiary of one of the web's most popular sites. “This is about participants in the web community opening up their systems.” It may also be about good business. By building their sites using open standards, and so making it easier for customers and developers to build other sites that plug into them, companies can both encourage innovation and boost their own popularity. “When you lower the barriers to entry, interesting things happen,” says Tim O'Reilly, president of O'Reilly & Associates, a firm based in Sebastopol, California that publishes programming handbooks. “The players who figure this out will wield a great deal of economic power.”
As often happens online, this trend is being driven from the bottom up, by users. Most mash-ups happen without the sites that supply the data even knowing about it. For example, Greg Sadesky, a programmer based in Quebec City, grabbed textual data from Yahoo! Traffic and map data from Google without consulting either firm, to create a mash-up (see traffic.poly9.com) that produces traffic maps. Similarly, Chris Smoak, who lives in Seattle, has mashed together several traffic, web-cam, transport-information and map sites to create Seattle Bus Monster, a public-transit site for the Seattle area (see www.busmonster.com). The rise of online journals, or blogs, has spurred the mash-up trend by bringing programmers together to discuss new ideas and tricks. Mr Sadesky credits the inspiration for his traffic-map mash-up to the blog run by John Resig (ejohn.org), which explains how to extract traffic data from Yahoo!'s website.
Mashing is getting easier for these after-hours programmers as big websites start to cater to their needs. ChicagoCrime.org, a mash-up that lets visitors view crime data by street, date, type and zip code on a map of Chicago, for example, said at the end of June that Google's decision to release an official method for linking to its maps had made the site far more reliable. Yahoo! opened up its map data in a similar way in June, and in July Microsoft unveiled a pre-release version of its mapping site, MSN Virtual Earth. It includes a “Community” button to help programmers create websites that incorporate data from Virtual Earth.
Such firms are happy to see their sites get mashed. At the Where 2.0 conference in San Francisco this summer, Brett Taylor, the product manager of Google Maps, noted that “everyone is doing it already”—so why fight it? “A mash-up lets a company like Google tap into the creativity of the world's programmers,” says Nathan Torkington of O'Reilly Media, who was the conference chairman.
So will mash-ups march on? Only if they lead to revenue, some predict. “Something has to evolve,” says Craig Donato, the founder of Oodle, a site with local buying, selling and donation listings. If the information being mashed is useful, he says, it is probably expensive for the originated sites to put on the web in the first place. At the Where 2.0 conference, Mr Taylor of Google said that programmers were free to use Google maps for mash-ups that were “free to consumers”—but added that his firm reserved the right to deliver maps with advertisements on them in future. Dave McClure of Simply Hired, a recruitment site based in Silicon Valley, says he expects the mash-up scene to change, just as the blogging scene did when Google's advertisement-placing service, AdSense, first appeared and “turned free content into a monetisable data source”.
There are already signs that mash-ups have commercial potential. Simply Hired and the social-networking site LinkedIn, for example, have already mashed themselves together. If you are a member of LinkedIn and go searching for a job on Simply Hired, you can link from a job listing to a list of LinkedIn contacts who could get you an introduction at the company in question. As well as helping users to land a job, this mash-up should help the two websites to boost their traffic. And in August, Salesforce.com, a pioneering provider of business software that runs inside web browsers, announced Smashforce, an initiative to make it easier to incorporate its software into mash-ups. A firm could, for example, combine a list of sales prospects with a map, to help a salesman plan his route.
All told, the urge to mix things up should keep companies and programmers busy for the foreseeable future—too busy, sometimes, even to use their own mash-ups. Mr Smoak, who created his mash-up during evenings and weekends, says he never gets up early enough to take the bus to his day job, at Amazon. “I'm not an early riser,” he says. “But if I stay up late I can do projects like this.” And what of Mr Rademacher's housing search? The popularity of his website helped land him a job at Google, but has also kept him so busy that he has not had time for any more house-hunting.
16.9.05
The doctor in your pocket: Nearly everyone in the developed world carries a mobilephone—so why not use it to deliver health care?
The doctor in your pocket
Sep 15th 2005
From The Economist print edition
Medical technology: Nearly everyone in the developed world carries a mobile phone—so why not use it to deliver health care?
GARY KATZ is a repeat offender. A few years ago, a nutritionist helped him to reduce his blood-cholesterol level from a troubling 286 to a reasonable 177. But after his annual check-up in April, Mr Katz found that his cholesterol was once again too high. The businessman turned to the same nutritionist as before, but now he and his food adviser have a secret weapon: the mobile phone.
Through a new service called MyFoodPhone, Mr Katz uses the camera built into his phone to take a picture of every meal. This is far easier than writing everything down in a food log, which the 44-year-old New Yorker did the last time he was fighting high cholesterol. At the end of each week, his nutritionist e-mails him a dietary critique. “I was never one for the whole food-log thing,” says Mr Katz, who owns a floor-covering business. “Now I'm doing better at keeping track of what I eat. I always have my phone with me—it's like having a conscience hanging on your waist.”
The notion of procuring health care via phone is not new: when doctors routinely made house calls, medical help was just a phone call away. “Most health-care services today are delivered inside medical premises,” says José Lacal of MotoHealth, the health-telemetry project run by Motorola, the world's second-biggest mobile-phone manufacturer. “But with the mobile phone, you can take the services with you.” HBS Consulting, a consultancy based in London, estimates that the global “telehealth” market—the use of telecommunications and information technology to deliver health care and related services—will grow to $7.7 billion in 2006, up from $3.2 billion in 2003.
So far, most mobile telehealth services, such as MyFoodPhone, simply use ordinary mobile phones to collect and transmit data. The next stage is to add specific medical sensors, which can even be incorporated directly into the handset. For example, LG, a South Korean handset-maker, started selling a phone with a built-in blood-glucose meter, for use by diabetics, in its home market last year. It can transmit blood-glucose readings to a doctor, parent or desktop computer for further analysis. Healthpia America, based in Newark, New Jersey, plans to launch the phone in America in January.
Motorola and Partners Telemedicine (a division of Partners HealthCare, a group of hospitals and health-care providers in Boston) have been testing devices that can transmit a patient's weight, blood pressure and other data. Weighing scales and blood-pressure monitors communicate via Bluetooth (a short-range radio technology) with the mobile phone, which then sends the data to the doctor. Clinical trials are under way in Barcelona and Boston, says Mr Lacal, with potential commercialisation as early as next year.
In Britain, a joint-venture between the Institute of Biomedical Engineering at Imperial College London, Toumaz Technology and Oracle, the world's second-largest software firm, has devised a “pervasive monitoring system” that will enter trials in 2006. A small sensor, attached using a sticking plaster, monitors the patient's heartbeat and detects irregularities. The resulting electrocardiogram data is sent wirelessly to a nearby mobile phone, which then transmits it to a monitoring centre, or directly to a doctor.
Mobile telehealth need not be so elaborate, however. SIMpill, a South African firm, makes a small device that clips on to a medication bottle and sends a text message to a central computer whenever the cap is removed. If no message arrives, the central computer sends a text-message reminder to the patient, or to a family member or carer. The system is now used by more than 2,000 people and can dramatically improve compliance, says SIMpill's founder, David Green. It has just been launched in America.
Many observers expect mobile telehealth to take off in mobile-loving South Korea and Japan, but to lag behind in America, where consumers are more likely to raise privacy concerns. But Donald Jones, head of mobile health care at Qualcomm, a wireless-technology firm based in San Diego, notes that phones' built-in security features make them far more secure than PCs.
Besides, the need for tools to improve the management of chronic health conditions cannot be overstated. According to America's Centres for Disease Control and Prevention, more than 90m Americans have a chronic illness, and they account for over 75% of the nation's $1.4 trillion annual spending on health care. So the mobile phone could be a useful tool to combat both chronic disease and runaway medical costs. Joseph Kvedar of Partners Telemedicine, who is also a professor at the Harvard Medical School, suggests that insurance companies might, for example, offer free phone minutes to customers who go for a walk every day. Their compliance would be monitored by a pedometer built into the handset.
Mobile phones' impact on health care could be even greater in the developing world, where mobiles far outnumber PCs. “For most of the world”, says Mr Jones, “this is the only computer they are ever going to own. It's on the internet. And they carry it everywhere.” Get ready for the doctor in your pocket.
7.9.05
What IT leaders do: Companies that rely on IT governance systems alone will come up short.
What IT leaders do
Companies that rely on IT governance systems alone will come up short.
Eric Monnoyer and Paul Willmott
The McKinsey Quarterly, Web exclusive, August 2005
Something's gone very wrong with the structures, processes, and policies that govern how a business makes IT decisions and who within the organization makes them. Most companies have such frameworks—commonly referred to as IT governance—in place today. In the best cases these systems help IT and business managers work together to make smarter IT investments that deliver real value.
Despite these well-defined rules, IT and the business too often lack a common understanding of the company's basic objectives and have conflicting opinions about technology options and priorities. A good deal of research shows that this misalignment usually results in failed IT initiatives and high costs.1
The problem is that IT governance systems have become a substitute for real leadership. Companies are relying on tightly scripted meetings, analyses, and decision frameworks to unite CIOs and business executives around a common vision for IT. But committee meetings and processes are poor stand-ins for executives who can forge a clear agreement among their peers about IT investment choices and drive the senior-level conversations needed to make tough trade-offs.
For several reasons, leadership can achieve what governance systems by themselves cannot. First, IT leaders earn the trust of their business colleagues, often by demonstrating that they understand the company in business terms, by examining IT options as business investments (rather than as technology solutions), and by managing the IT function as a business—using business metrics to quantify results, for example.
Trusted, credible leaders articulate a vision for IT's role in the company and ensure that this vision is clearly understood by managers throughout the organization. They inspire other executives to pursue new IT-enabled business opportunities and have enough clout to keep managers focused on the right issues and on making the most effective decisions.
Governance systems by their nature lack the focus, energy, and high-level attention that an individual leader can provide. Meetings and rules can't make executives trust each other—trust is built at a personal level. Processes can't command the attention executives give to trusted peers. In some companies, for instance, business leaders send delegates to technology committee meetings; they would never shrug off a meeting with a respected colleague, however. Systems alone don't forge common visions or inspire action; without a leader, governance systems are like a vehicle without an engine.
In companies with strong IT leaders, governance constitutes a much more flexible set of managerial activities, involves fewer people and fewer meetings, and is typically tailored to fit the IT leader's style, much as executive committee activities often reflect a CEO's leadership approach.
As companies turn their attention to growth and place bets on new IT investments, they can no longer allow systems to substitute for strong IT leadership. The executive team must be more creative about identifying leaders, helping them succeed, and redesigning governance systems to support these leaders rather than to compensate for their absence.
A tale of two banks
Consider the case of one large European bank: the effectiveness of its IT strategy was being undermined by a leadership vacuum. The head of retail banking was pushing hard for new systems and processes to improve customer relationships, the CEO wanted to consolidate operations across organizational boundaries, and the CIO's top priority was to renew the bank's core applications and systems.
The bank had a clearly defined IT governance structure in place for resolving exactly this kind of alignment issue. A committee of business and functional executives followed a step-by-step process for analyzing and reviewing IT options and setting priorities. But the bank still lacked a clear vision for IT's role in supporting the bank's overall strategy. The committee weighed the relative merits of the options against one another rather than using a common understanding of general priorities to assess each initiative. The committee was simply not capable of becoming the driving force in resolving these conflicting senior agendas. How could it be? It would be like asking a nation's legislative body to act as a leader. In the end, the CIO hijacked the process to push his IT agenda forward.
In stark contrast, at another European bank competing agendas are resolved by an IT leader (in this case, the CIO) with the clout to get executives to discuss options and reach a consensus—even if it isn't the decision they would make on their own. More important, the bank has fewer major conflicts over IT investments, because the CIO has effectively integrated a common vision for technology with the corporate strategy, thus avoiding lengthy debates about which investments are desirable.
The CIO has clout because he earned it. He is regarded as a peer by the other executives; he understands the bank's businesses and thinks about them in the same way the other executives do; he uses their language; he thinks about initiatives as business options (not technology ones) and assesses them with the appropriate metrics; and he understands the constraints of the businesses and works within them. For instance, he's careful to plan, sequence, and finance necessary investments within the constraints of the bottom line of each business unit.
At this second bank, IT governance is less formal and therefore far more effective than at the first one. Because the CIO has excellent working relationships with the business leaders, they use personal discussions to make quick decisions collectively rather than resorting to formal meetings. This approach has enabled the CIO and his executive colleagues to consolidate several committees at different management levels into a single executive IT council that understands the bank's IT strategy and makes investment decisions accordingly.
Our analysis of the IT decisions at these two banks highlights a very clear message. The bank with an IT leader makes business-focused IT decisions that have helped increase its earnings each quarter and are supporting revenue growth in core businesses. In contrast, the bank relying on governance processes to act as a "ghost leader" has stalled; costs are high and transformation is slow.
Lead IT governance—don't be led by it
In companies with strong IT leaders, the IT governance structures are more efficient and streamlined and less bureaucratic than in companies without such leaders. Over time, leaders figure out what tasks can be achieved through relationships and what must be accomplished through more formalized assessment and decision-making processes. The balance varies, of course, depending on the leader's style, the top team's chemistry, and the specific processes required to get things done.
An efficient process typically gives the executive IT committee the space to solve higher-value problems. One company's executive council, for instance, focuses on detailed analyses of how to implement new investments with maximum speed in order to reap the expected benefits as soon as possible. In particular, the council examines how to communicate its IT decisions to employees throughout the organization's business and IT-management ranks.
Some companies streamline IT governance even further, by integrating it with existing business governance processes. At one European insurance company, the executive committee that makes most of the major business decisions also handles IT. The executive team believes this approach is more effective because IT choices aren't viewed as separate and parallel to business decisions but as one aspect of them.
Unfortunately, many other companies try to solve the problems that stem from a lack of leadership—incoherent IT strategies, competing agendas, missed opportunities for the businesses to leverage IT, misalignment and miscommunication between IT and business managers—by ladling on more governance. These companies assume that greater alignment and better IT decisions would result from clearer rules, more meetings, different people at the meetings, more rigorous analysis of business cases, or more forms and checklists.
They are wrong; additional IT governance measures don't work and instead often exacerbate the problems. When one European financial-services company tightened its governance procedures, for instance, business executives became even more disaffected and participation plummeted. At another company, governance has evolved into a mammoth system of checks and balances, involving long, arduous meetings and multiple committees—a process intended to allow managers to question or defend the business case for new investments aggressively.
IT governance can always improve, but never enough to compensate for a lack of IT leadership; there is no substitute for the sheer power of having leaders who trust and respect each other. Indeed, IT leaders trump governance alone in three other important respects.
Leaders address issues that governance misses
Companies structure their governance systems to decide whether to increase or cut investments in technology. They rarely use these processes to examine the broader questions regarding IT value that leaders routinely confront: what is the role of IT? How do we measure and improve the impact of IT on the business? What innovations should we be exploring? What strategies are our competitors pursuing? And what constitutes best practice?
Leaders accommodate different executive styles; governance doesn't
Some business leaders prepare for IT committee meetings by getting input and advice from their own managers and by reflecting on how they operate in their own domains. Others prefer going over issues and potential options with the CIO. Some executives delegate responsibilities to trusted subordinates; others wish to exert total control by conducting personal reviews after the official IT committee has met and then making a decision. Leaders understand these stylistic differences and accommodate them. In many companies, however, governance is a process that doesn't allow for much flexibility—rules restrict when and how decisions are made, and business leaders are expected to fall into line.
Leaders are accountable
Executives routinely accuse IT of managing projects poorly or of failing to translate business needs into IT solutions. IT, for its part, often blames business for a lack of involvement and quality input. Leaders must be accountable where governance isn't; the buck stops with them.
The way forward
True IT leadership is rare. It results only from a deliberate effort by the executive team—and often in reaction to specific circumstances. At one company that had grown through serial acquisitions, for instance, the top team concluded that strong IT leadership was needed to bring coherence to the company's fragmented systems. In other cases, IT leaders emerged at companies that depended increasingly on performance outside their home market or where the CEO integrated IT into the company's management culture.
The common denominator is that the executive team must take responsibility for finding an IT leader and then commit to making that person successful. Three lessons emerge.
1. Hire creatively
Too often, CEOs and their top teams rely on stereotypes about who should lead IT. Finding the right person with the necessary skills isn't easy, since the role is fraught with paradox. An IT leader must be a businessperson who understands IT: an executive—like the CEO—who can create change but who individually may not have the clout within the organization to make things happen, and who is a peer of business leaders yet respected as "one of us" by the IT staff.
CEOs sell their companies short by searching solely for CIOs to fill this role. Banks in North America and Europe have asked chief financial officers or chief operating officers to lead IT. One large global energy company rotates business executives into the role for a set period to ensure both that someone with business skills runs IT and that the business units are then seeded with IT-savvy managers.
2. Help IT leaders succeed
The IT leader must be part of the executive team to get results and to build the necessary relationships and credibility within the company. CIOs who are perceived to be operating managers—not leaders—rarely sit on the management committee and often report to executives other than the CEO. The solution isn't to clear space at the table for an operating manager; instead companies should search for an IT leader who adds value to the management team.
Obviously, the IT leader needs the right resources to succeed, but an explicit mandate within the company—including a role in the decision-making process—is equally important. The management team may opt, for example, to give the IT leader veto rights over any project that isn't compatible with the company's IT architecture. One European telecommunications company made the IT leader its process architect. Business and functional leaders still operate the processes but must convince the IT leader in order to change them.
3. Create the conditions for aligning IT and business
Alignment won't come about simply from discussions between IT and business units. Instead, clear frameworks for decision making and alignment must be forged within these boundaries. The company's strategy should be specific enough for IT and business leaders to discuss trade-offs rather than debate what the strategy means, for example.
In some cases, performance frameworks help to align business and IT. One telecommunications company, for instance, uses business rather than technology metrics to review and compensate its IT leader.
The difference between companies with strong IT leaders and those that use governance as a substitute for leadership is striking (exhibit). Executive teams with a strong IT leader make better, faster decisions about technology than do companies that rely solely on a governance system—no matter how effective it is.
About the Authors
Eric Monnoyer is a principal and leads McKinsey's IT practice in France. He specializes in IT performance management and is based in Paris. Paul Willmott is a principal in McKinsey's global IT practice and specializes in IT organization and governance. He is based in London.
This article was first published in the Fall 2005 issue of McKinsey on IT.
Notes
1Andrew M. Appel, Amit Dhadwal, and Wayne E. Pietraszek, "More bang for the IT buck," The McKinsey Quarterly, 2003 Number 2, pp. 130–41.
31.8.05
Shifting to DVRs: 88% of US adults are aware of DVRs, up from 74% in 2004\
Shifting to DVRs
Published: August 29, 2005
(After September 06, 2005, this article will only be available to eStat Database subscribers.)
Americans may not own a lot of digital video recorders yet, but more and more of them know about DVRs.
A Leichtman Research Group survey found that 88% of US adults are aware of DVRs, up from 74% in 2004.
A Find/SVP study puts DVR penetration at about 15%. The Find/SVP survey found that time-shifted viewing was the most commonly cited benefit of DVR use, followed by the ability to skip commercials.
"Like many disruptive technologies, the impact of DVRs was overestimated in the short term and perhaps underestimated in the longer term," said Ben Macklin, senior analyst at eMarketer and author of the recently published report, US Digital TV: Think Outside the Box. "DVR adoption has been relatively slow, considering the technology has been around since the late 1990s, but all indications suggest DVR technology will be a mainstream product/service by 2010."
To learn more about this sector, read the eMarketer report, US Digital TV: Think Outside the Box.
30.8.05
IBM and the future of the Home
http://www.ibm.com/investor/viewpoint/podcast/30-08-05-1.phtml
>>> N.B.: New tel from / Nouveau tel à partir du 29-07-2005: (514) 964-4192 | IBM T-L 314-4192 <<<
| Jean-François Barsoum Gestion de l'innovation pour ThinkPlace :: ThinkPlace Innovation Catalyst Innovation : Innovation blog / Blogue « Innovation » (Internet) ThinkPlace (W3 Intranet) Corporate Responsibility/ Responsabilité sociale : News / Nouvelles | W3 Community / Communauté W3 |
22.8.05
Pocket-sized computer 'soul' developed
Pocket-sized computer 'soul' developed
http://www.newscientist.com/article.ns?id=dn7826
29.7.05
From push to pull: The next frontier of innovation - Some companies are learning how to take a more creative approach to mobilizing their resources.
http://www.mckinseyquarterly.com/article_print.aspx?L2=21&L3=37&ar=1642
From push to pull: The next frontier of innovation
Some companies are learning how to take a more creative approach to
mobilizing their resources.
John Seely Brown and John Hagel III
The McKinsey Quarterly, 2005 Number 3
Ever since 1911, when Frederick Winslow Taylor published The Principles of
Scientific Management, businesses have pursued efficiency with a focus
that borders on obsession. Nearly a century later, CEOs and management
authors are still writing hymns of praise to the benefits of executing
operations more efficiently than the competition does. This fixation has
yielded some highly precise approaches to managing modern institutions and
technology. Although these practices vary in their details, they share a
common foundation: pushing resources into the areas of greatest
anticipated need. In today's business world, highly automated factories or
service platforms, supported by rigid and standardized processes, deliver
resources to the right places at predetermined times. In information
technology, massive enterprise applications specify activities to be
performed and resources to be deployed to meet anticipated demand. In
education, standard curricula expose students to codified information
through a predetermined sequence of experiences—an approach many
corporations follow in their employee training.
In each of these examples—and in "push" systems generally—the core
assumptions are that companies and other institutions can anticipate
demand and that mobilizing scarce resources in previously specified ways
is the most efficient and reliable way to meet it. But the efficiency of
push systems comes at a stiff price, for they require companies to
specify, monitor, and enforce detailed activities and tasks. This rigidity
necessarily restricts the number and diversity of the participants in push
models, thus limiting the innovation and learning that can take place in
them. It also tends to turn workers into mere instruments of management at
a time when self-directed effort from a broad range of employees is ever
more essential to big corporations (see "The 21st-century organization").
The highly specified, centralized, and restrictive nature of push systems
prevents companies from experimenting, improvising, and learning as
quickly as they might, both throughout their own organizations and across
others. Push systems not only inhibit product innovation but—even more
important—make it much harder to implement incremental process innovations
rapidly. In a world where the relative pace and trajectory of capability
building are of constantly rising importance,1 push systems thus hinder
companies from participating in the distributed resource networks that are
now indispensable to competitive advantage. The next frontier of
innovation will require the broader adoption of pull capabilities as well
as less reliance on traditional push systems, which, as demand becomes
more and more difficult to forecast, increasingly fail to deliver even the
efficiency they were designed to promote. Organizations that use them
either pile up inventories or go through costly somersaults in an effort
to keep up with unanticipated market shifts.
Signs of a new approach
Many companies continue to operate on the flawed assumption that demand is
intrinsically foreseeable. But others are beginning to embrace a more
flexible approach to setting in motion (or mobilizing) tangible and
intangible assets (or resources), which may reside within or outside the
company. This new approach might be called the "pull" system of resource
mobilization. Its early elements began to emerge from Toyota Motor's
lean-manufacturing system in the 1950s, when the company began pulling
resources into the assembly line as needed rather than allowing
inventories to pile up during production. But more versatile and
far-reaching pull systems—which extend beyond production and, indeed,
beyond the enterprise itself—are now beginning to emerge not just in
manufacturing and supply chain operations but also in arenas as diverse as
pharmaceutical R&D and the media. These early pull models, driven by
changing strategic and operational needs and facilitated by the Internet,
are visible primarily at the periphery of more mature push models. Often,
as in education, they are emerging under the radar, in unexpected areas.
These systems have far-reaching implications for the way companies
organize and manage their activities.
How pull systems work in one industry
Over the past decade, the mass media have been transformed by the
digitization of content (text, voice, and video) and by new ways for
customers to access, assemble, and distribute it through the Internet.
Rather than waiting for media companies to push out their content, for
instance, their customers increasingly pull it in at will. New media
distribution businesses are breaking down the traditional channels' shelf
space constraints, radically expanding the range of content available, and
providing robust tools to help users search for it. Sometimes these
businesses, such as Amazon.com and Netflix, resemble conventional
retailers in the sense of providing a single point of access to a broad
assortment of media. Some provide new ways to sample media before the
purchase (for instance, the TouchTunes Rhapsody digital jukebox for
music). But others lack any central hub and instead help owners of content
interact with each other directly. Half.com (now owned by eBay) is
analogous to a local flea market. Peer-to-peer networks such as BitTorrent
let participants download movies, music, and other digital media.
In the media business, pull approaches have transformed more than just
distribution channels. On the production side, a vibrant "remix" culture
has emerged thanks to the availability of widely affordable digital
audio-editing tools, which make it possible for DJs in nightclubs and
other music fans to pull in tracks from a variety of music sources and to
recombine them. "Blogging" tools help users "publish" their own writings,
music, or photographs, most often by pulling in content from a broad range
of sources and creatively mixing and commenting on it.
Global process networks
Skeptics might argue that the media business is unique and that its
emerging pull systems have little application to sectors whose products
are harder to digitize. Yet pull approaches to the mobilization of
resources are also taking hold in product businesses, particularly in
categories characterized by compressed life cycles and rapidly evolving
customer demand.
Consider the three core operating processes of a business: managing supply
chains (including manufacturing and logistics), creating and
commercializing products, and managing customer relationships. In
industries as diverse as apparel, computers, and motorcycles, new
approaches to the mobilization of resources—what we call global process
networks—are emerging to organize these three processes across hundreds,
and often thousands, of enterprises. Such global process networks, which
change size and shape depending on the challenge in question, use
significant features of the pull model. Participating companies operate
across traditional corporate boundaries, collaborate on innovative
solutions, and learn from one another in a way that helps them speed up
the building of capabilities.
Supply chain management and manufacturing. Li & Fung, a Hong Kong-based
apparel producer and distributor that works with 7,500 business partners,
in 37 countries, can call on any number of specialists to manufacture
everything from high-end wool sweaters to synthetic slacks. The company,
one of the new model's most sophisticated practitioners, has rewritten the
rules of supply chain management. Traditional supply chain managers focus
on limiting the number of partners and on creating tightly integrated
operations—the Wal-Mart approach. Orchestrators like Li & Fung are rapidly
expanding the range of participants in order to gain access to more
specialized skills, as well as nurturing and developing relationships that
help all parties build their capabilities more quickly. Li & Fung sits at
the hub of a network of specialist enterprises that pull in resources in
different combinations and configurations, depending on the nature of
demand.
Product innovation. Taiwan's original-design manufacturers, such as Compal
and Quanta Computer, offer equally compelling examples of distributed
product innovation. These ODMs creatively pull together highly specialized
component and subsystem suppliers in order to generate ideas for
delivering higher performance at lower cost in a broad range of digital
devices, including digital still cameras, mobile telephones, and notebook
computers. Instead of designing products in detail from the top down, ODMs
specify ambitious performance targets and then rely on this diverse
network of technology partners to find new ways of meeting them.
A variety of companies, such as Eli Lilly, Nokia, and P&G, are also
deploying informal open-innovation techniques. In 2001, for example, Lilly
created a wholly owned subsidiary—InnoCentive—that has recruited a
distributed network of more than 80,000 research participants (called
"solvers"), in over 170 countries, to help its clients find solutions to
difficult R&D challenges. InnoCentive has more than 30 such clients
(called "seekers"), including Dow Chemical, P&G, and its own parent,
Lilly. When seekers confront a particularly difficult research challenge,
they post their requirements to InnoCentive's solver network and offer a
bounty to anyone who finds a solution. InnoCentive's success rate is
roughly 50 percent—not bad for research problems that the seekers'
internal R&D staffs couldn't handle.
Most interesting of all, perhaps, are the signs that InnoCentive's solver
network is beginning to self-organize, with diverse solvers coming
together to address a specific seeker's needs. This is a classic pull
system: when needs can't be easily determined in advance, companies can
create platforms to mobilize distributed resources readily.
Employee learning and education. Cisco Systems has shown how organizations
can apply the new model to partner-training and -learning activities,
which are increasingly important for the smooth functioning of global
process networks. The company's groundbreaking (and robust) e-learning
platform gives more than 40,000 of its distributed channel partners—with
combined sales and technical staffs of 400,000-plus employees—access to
training modules at times and places of their own choosing. Cisco and its
partners are thus able to solve the problems of customers quickly.
Pull approaches are also highly visible in the context of open-source
software. Discussions on that subject tend to focus on the innovative
techniques used to produce complex systems by mobilizing highly
distributed programming talent. Far fewer observers have noted the
significance of open-source software as a platform for effective learning
through apprenticeship. Open-source programmers often start with code
developed by others and then develop enhancements for specific
environments. As the code is generated, it is posted for review and
testing by a broad community of experienced programmers. Participants in
open-source projects learn at four levels: they observe and work with code
from other programmers, they observe their own code in action, they get
feedback and commentary from other people who execute their code, and they
have access to feedback and commentary about code developed by other
open-source programmers. Participants begin on the periphery of the
platform and advance, by building their skills, to become coaches and
mentors. In this way, they structure their own learning environments,
pulling in whatever resources are most relevant and timely.
Contrasting push and pull
Push systems contrast starkly with pull ones (exhibit), particularly in
their view of demand: the former treat it as foreseeable, the latter as
highly uncertain. This difference in a basic premise leads to
fundamentally different design principles. For instance, instead of
dealing with uncertainty by tightening controls, as push systems would,
pull models address immediate needs by expanding opportunities for local
participants—employees and customers alike—to use their creativity. To
exploit the opportunities that uncertainty presents, pull models help
people come together and innovate by drawing on a growing array of
specialized and distributed resources.
Rather than seeking to constrain the range of resources available to
participants, pull models constantly strive to expand it while helping
participants to find the most relevant options. Rather than seeking to
dictate the actions of participants, pull models give even people on the
periphery the tools and resources (including connections to other people)
needed to take the initiative and to address opportunities creatively as
they arise. Rather than treating producers as passive consumers whose
needs can be anticipated and shaped by centralized decision makers, pull
models treat people as networked creators even when they actually are
customers purchasing goods and services. Pull platforms harness their
participants' passion, commitment, and desire to learn, thereby creating
communities that can improvise and innovate rapidly.
The open-source world isn't the only niche community where this kind of
learning and innovation now take place. The world of rare books, for
instance, has been turned upside down by Amazon's ability to aggregate the
offerings of many local special-interest sellers; customers are no longer
constrained by the quirky collections of titles assembled by owners of
antiquarian bookshops in out-of-the-way physical locations. In extreme
sports such as surfing and windsurfing, participants increasingly innovate
and cocreate new offerings, such as footholds on windsurfing boards to
enhance wave jumping.2 And customized cars, or hot rods—automobiles
modified to suit individual tastes—rank among the fastest-growing segments
of the North American automobile market. In each of these cases, consumers
are becoming more engaged in the creative and commercial processes.
Cocreation is a powerful engine for innovation: instead of limiting it to
what companies can devise within their own borders, pull systems throw the
process open to many diverse participants, whose input can take product
and service offerings in unexpected directions that serve a much broader
range of needs. Instant-messaging networks, for instance, were initially
marketed to teens as a way to communicate more rapidly, but financial
traders, among many other people, now use them to gain an edge in rapidly
moving financial markets.3
How to pull
The benefits of pull systems should by now be clear: enhanced innovation,
increased opportunity for collaboration, closer relationships with
customers and suppliers, more rapid feedback, richer reflection on the
results of distributed experimentation, and greater scalability, for
example. In our view, however, the essential reason to begin implementing
pull systems is the fact that they help companies to secure deeper sources
of competitive advantage at a time when the traditional sources are
disappearing. Although a comprehensive exploration of the way big
corporations can assemble pull systems is beyond the scope of this
article, several areas of focus are worth highlighting.
Use metaphors to deepen understanding
Push models are typically based on programs—an image that conjures up
thick and tightly scripted manuals, standardized curricula, the offerings
of network television, and software. By contrast, pull approaches tend to
work on platforms, a word suggesting a more open-ended design, to
accommodate the changing needs of participants. The right image is
conveyed by Expedia's travel service or a hospital's emergency ward.
These platforms are invariably modular to help make resources and
activities more accessible and flexible. Instead of being rigidly
specified, as in push systems, the modular elements are "loosely coupled":
they can be joined easily, without friction or customization, and just as
easily disassembled and reassembled. Interfaces show users the contents of
the module and how to access it.4 A module might, for instance, consist of
a business partner or partners (as in Li & Fung's global process network)
or of a specialized tool (such as a radio telescope or an electron
microscope that can be operated remotely through standardized interfaces).
Understand the spectrum
Pull platforms and push programs are not mutually exclusive. Li & Fung's
global process network is a highly flexible pull platform, for example,
yet many apparel producers participating in it organize their own
resources in the traditional top-down way. Amazon and eBay use pull models
to help consumers gain access to books produced by traditional push
programs, but pull distribution systems are now creating opportunities to
reconfigure the production process through publishing on demand.
Examine your mind-set
Companies incorporating pull platforms into their operations must
challenge and refine their key assumptions about what is required for
success: greater control, for instance, will no longer be the appropriate
response to growing uncertainty, which must be seen as an opportunity, not
a threat. Executives will have to stand back and let individual employees
identify and mobilize resources and collaborators at the right time. In
many cases, it will be necessary to transform not-invented-here cultures
that prevent organizations from effectively leveraging third-party
resources. Instead of wondering what companies can get from their business
partners, executives will have to ask what they and their business
partners can learn from one another.
Reexamine your company's focus
As we have noted, companies traditionally carry on three core processes:
managing infrastructure, managing customer relationships, and creating and
commercializing products. It's tough to be on the leading edge in all
three areas, but in an effort to retain control, most companies try. More
versatile pull platforms let executives concentrate on becoming world
class in one of the three processes, relying on external partners to
supply the elements of the other two.5
Start where you are
In our experience, most companies already use pull platforms in fragmented
and informal contexts. Executives can begin preparing for a more
systematic and formal transition from push to pull by investigating how
effectively their companies now utilize such pull capabilities and which
of their most profitable revenue streams might be vulnerable to
pull-oriented competitors. These executives can start to transform
corporate operating processes by challenging the managers who run them to
deploy additional pull capabilities as a way of meeting performance
targets. And companies can begin to redesign the organization by making
pivotal employees—engineers in a high-tech company, for example, or brand
managers in a consumer goods one—responsible for creating a pull platform
to improve the way they work, both within and outside the enterprise.
The cyberpunk author William Gibson has observed that "The future is
already here—it is just unevenly distributed."6 Pull systems may seem a
remote threat, given their location at the periphery of many industries.
Yet forces at the periphery can come to the center with astounding speed.
As they do, business executives will have to reassess nearly every aspect
of today's corporation.
About the Authors
John Seely Brown, the former head of Xerox's Palo Alto Research Center and
chief scientist at Xerox, can be reached at jsb@johnseelybrown.com; John
Hagel, an alumnus of McKinsey's Silicon Valley office, is now a senior
adviser to the Firm and can be reached at john@johnhagel.com. Their most
recent book is The Only Sustainable Edge: Why Business Strategy Depends on
Productive Friction and Dynamic Specialization.
Notes
1John Seely Brown and John Hagel III, The Only Sustainable Edge: Why
Business Strategy Depends on Productive Friction and Dynamic
Specialization, Boston: Harvard Business School Press, 2005.
2Extreme sports are a particularly active area for user cocreation because
their participants continually tinker with the equipment to reach the next
level of performance. Participants themselves determine what isand isn't
fair on a case-by-case basis, and through viral marketing useful
innovations spread like wildfire.
3Information technology will play a central role in helping companies to
make the shift from push to pull systems. IT will be radically transformed
as it addresses the challenge of distributed pull systems spanning
thousands of enterprises: "outside-in" IT architectures, for example, will
replace traditional "inside-out" ones. We will discuss the IT implications
of pull systems in greater detail in a working paper on
edgeperspectives.com.
4John Seely Brown, Scott Durchslag, and John Hagel III, "Loosening up: How
process networks unlock the power of specialization," The McKinsey
Quarterly, 2002 special edition: Risk and resilience, pp. 58–69.
5John Hagel III and Marc Singer, "Unbundling the corporation," The
McKinsey Quarterly, 2000 strategy anthology, pp. 147–56.
6Talk of the Nation, National Public Radio, November 30, 1999.
27.7.05
Scientists identify new weapon to fight fraud
http://news.yahoo.com/news?tmpl=story&cid=585&e=2&u=/nm/20050727/sc_nm/fraud_dc
Scientists identify new weapon to fight fraud
1 hour, 23 minutes ago
LONDON (Reuters) - Nearly all types of paper, plastic and packaging have
unique microscopic imperfections or fingerprints on their surface that
could be used as a cheaper way to prevent fraud, scientists said
Wednesday.
ADVERTISEMENT
The identity code is virtually impossible to change and can be easily read
with a portable laser scanner to combat the forgery of passports, ID cards
and other documents.
"Our findings open up the way to a new and much simpler approach to
authentication and tracking," said Russell Cowburn, a professor of
nanotechnology at Imperial College London.
"This is a system so secure that not even the inventors would be able to
crack it since there is no known manufacturing process for copying surface
imperfections at the necessary level of precision," he added.
Nanotechnology involves the manipulation of materials on an atomic or
molecular scale.
In research published in the science journal Nature, Cowburn and
colleagues at Imperial College and Durham University studied the flaws on
plastic, paper and coated cardboard surfaces using a focused laser and
recorded the intensity of the reflections in scattered light.
Each surface had a distinctive pattern that remained even if the material
was mangled, baked, submerged in cold water or scoured with an abrasive
cleaning pad.
"The beauty of this system is that there is no need to modify the item
being protected in any way with tags, chips or ink -- it's as if documents
and packaging have their own unique DNA," Cowburn explained in a
statement.
The scientists are now working with a technology company to take the
product to the market.
The Next Gold Mine: Moblogs
The Next Gold Mine: Moblogs
With mobile blogging technology, sharing your cell-phone pictures is
finally easy. And that's just what carriers have been waiting for.
By Om Malik, July 26, 2005
Put camera phones together with blogs and you get the next big thing in
mobile communication: "moblogs." A moblog is a blog composed of pictures
uploaded from your cell phone or other handheld. (If you saw the pictures
of the London bomb scenes that were posted just after the blasts, you've
already seen moblogging in action.) Check out Flickr to see a vast array
of these mobile photo albums. While users seem to love the ability to post
pix on the fly, the real beneficiaries will be carriers, who've been
looking for ways to plump up their flat revenues-per-customer.
Here's why. Everyone expected camera phones to unleash a flood of photo
sharing and, with it, growing demand for bandwidth. But that didn't happen
because sharing pictures with your cell phone is a real pain in the neck:
Uploading them is awkward and often doesn't work. But moblogging relies on
technology that makes it a snap: Sign on with a moblog service like Flickr
and start e-mailing photos from your phone to that account.
No wonder sites like Flickr and Picoblog have been growing 30 to 50
percent every month. As more and more consumers share their pictures,
you'll start seeing carriers selling more lucrative flat-rate data plans
in addition to their standard voice-only plans. I recently upgraded my
$10-a-month mMode data plan from AT&T Wireless (part of Cingular) to a
$25-a-month flat-rate plan, and my monthly phone bill went from about $60
to $75. You can see why carriers should be giddy over the growth of
moblogs.
They can goose this growth even more. The key is to lean on handset makers
to add moblogging software to their devices. Right now, only Nokia offers
such software, Lifeblog. Its rivals could easily pick up the technology
from a handful of tiny startups such as Splash Data and PicoStation. When
that happens, camera phones will turn into real gold mines.
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----
26.7.05
Reaching Safe Ground
http://www.technologyreview.com/articles/05/07/wo/wo_072605wolman.asp?p=0
Although the tsunami simulator emphasizes communications, there's no limit
to the layers of data it can simulate. It could include architectural
designs that predict if structures will stand or be damaged, what bridges
could survive a wave impact, the importance of the time of day, or even
the likelihood that people will hear a warning, but not heed it.
Furthermore, the model incorporates not only vehicular movements but also
foot traffic.
"This is something they're really focusing on in Japan: getting beyond
dependence on automobiles for evacuation," says Crawford. In
geographically similar areas, such as the narrow, low-lying peninsula of
Long Beach, Washington, this approach would be critical, as well, since a
tsunami there would likely take out major roads and bridges.
In fact, Crawford says officials in Washington, Oregon, and northern
California stand to benefit greatly from such a social science model. For
instance, it has already helped Crawford and other planners figure out
where to locate safe "assembly areas" that evacuees could quickly reach by
foot.
"What this computer simulation does is allow us to take inundation maps
and models showing wave arrivals, combine them with information about
infrastructure, and then take into account the social science as well,"
says Crawford. "Running these models gives a fairly close prediction of
whether we can evacuate our people in time and what the collateral damage
would be."
Nicholas Negroponte, founder and chairman of MIT's Media Lab, showed attendees the screen of the Hundred-Dollar Laptop
http://www.technologyreview.com/articles/05/08/issue/editor.asp?trk=nl
excerpt:
Nicholas Negroponte, founder and chairman of MIT's Media Lab, showed
attendees the screen of the Hundred-Dollar Laptop, or HDL. Beginning in
2006, he said, he would build 100 million to 200 million HDLs every
year--and distribute them to the children of the poor world. Many
attendees had read about Negroponte's idea and dismissed it as quixotic.
Hearing how an HDL might be built, seeing a part of it, and realizing the
scale of the project produced a rustle of delighted interest.
Negroponte recently wrote to me about what he hoped the HDL would do:
"Education: one laptop per child. Whatever big problem you can imagine,
from world peace to the environment to hunger to poverty, the solution
always includes education. We need to depend more on peer-to-peer and
self-driven learning. The laptop is one important means of doing that."
Can a $100 computer be built? Maybe. Negroponte does not plan to use three
expensive components of conventional laptops: Microsoft Windows, a
traditional flat-panel screen, and a hard drive. Instead, the HDL will be
loaded with Linux and other open-source software; its display will use
either a rear-projection screen or a type of electronic ink invented at
the MIT Media Lab; and it will store one gigabyte's worth of files in
flash memory.
The HDL has a number of other, intriguing features. Since many villages in
the poor world do not have electricity, the machines may be powered by
either a crank or "parasitic power"--that is, typing. Once turned on, HDLs
will automatically connect to one another using a "mesh network" initially
developed at MIT and the Media Lab. In the mesh network each laptop serves
as an information-relaying node. Households that have HDLs will be able to
communicate with each other by e-mail or voice calls.
Most importantly, Negroponte wants every mesh network to have access to
the Internet. The laptops will be loaded with Skype, a communications
application that provides free telephone calls. Consider: the most forlorn
parts of the globe might become part of the wider world.
19.7.05
Future Boy: The Culture of Participation
The Culture of Participation
Startups like JotSpot and Zazzle are cashing in on the creativity of their
customers.
By Erick Schonfeld, July 18, 2005
Blogs, wikis, Flickr, Zazzle. These are not the names of strange aliens
from other planets. They are the expressions of an emerging culture right
here on Earth. It’s a culture in which every citizen is a publisher,
photographer, programmer, or product designer. It’s a culture that's
blurring the lines between amateur and professional, consumer and creator.
It’s the culture of participation.
Blogs have given rise to millions of citizen journalists, all
self-publishing maniacally in search of an audience. Wikis, of course, are
group blogs that turn the participation dial up a notch by allowing
multiple authors to contribute to the same webpage. The photo-sharing
website Flickr is a natural consequence of the spread of digital cameras:
Snap pictures, download them to a computer, and upload them to the Web
(where friends, or anyone else, can see them). Video will be next.
But the culture of participation goes beyond blogs, wikis, and showing off
your digital photos. Joe Kraus, one of the original founders of Excite, is
now CEO of JotSpot, a corporate wiki subscription service. He says, "I
think wikis are the tip of a larger trend: do-it-yourself."
While wikis make it easy for people to publish a communal website, Kraus
thinks "the next leap is to make it easy for people to publish an
application." He's talking about taking a lot of the stuff that people
currently manage in Excel spreadsheets and making it simple to publish
those things on the Web as applications that can, say, track deals,
contracts, projects, or wedding invitations. In other words, he wants to
make it easy for people to create their own custom software and share it
with friends and colleagues without having to know how to write a single
line of code.
The basic premise of the culture of participation is that any content that
can be created digitally can be shared with the world. And, consequently,
any digital content can be turned into a product and sold on the Web.
That's the fundamental insight of a startup called Zazzle, which has been
quietly building a business over the past two years by allowing anyone to
upload digital images to its website and print them on T-shirts, posters,
and greeting cards. Starting today, Zazzle will also sell stamps that can
be customized with pictures of your dog or Mickey Mouse. (Branded images
from Disney, Fox, and other companies are available for mixing and
matching as well.)
Here's the catch: Zazzle is more than just a do-it-yourself site. Many
people choose to make their photos or artwork available to anyone who
visits. Zazzle has thousands of branded images on the site, but hundreds
of thousands more are contributed by individuals. Members generally
receive a 10 percent royalty every time one of their images is used for a
T-shirt or poster Zazzle sells. (Disney and Fox get many times more than
that.) "The marketplace succeeds only if we can offer something for
everyone," explains Zazzle CEO Robert Beaver. That's why he offers the
full spectrum, from Winnie the Pooh posters to sci-fi artwork created by
freelance graphic designers. It's worth noting, however, that the majority
of Beaver's sales (he won't reveal an exact figure but claims it's in the
millions) come from the customer-generated images.
Zazzle takes the idea of consumer participation (and mass customization)
to a new level. Not only is there an almost infinite variety of product
combinations that consumers can create on the site, but if they don't find
what they like, they can add their own digital creations to the mix. "It
allows people to express their creativity in digital form and then allows
them to turn those into products either for themselves or for other
people," explains Ram Shriram, who recently participated in a $16 million
venture investment in the company with John Doerr of Kleiner Perkins
Caufield & Byers. (Both Shriram and Doerr were also early investors in
Google.) Shriram adds, "I clearly was not just looking at it from the
perspective of T-shirts and posters. I think this idea ultimately can be
bigger."
Someday the culture of participation will enable not only personalized
stamps but personalized fabrication of things like electronics,
automobiles, and furniture. Somebody just has to figure out how to bring
computer-aided design software to the masses. Maybe that can be Joe
Kraus's next startup. It's not such a crazy idea. If the Web teaches us
anything, it's that a lot of people out there would rather make things
themselves than rely on some company (or corporate IT person, for that
matter) to do it for them.
----
14.3.05
Google Maps pushes the envelope
Google Maps pushes the envelope
New service is a showcase of DHTML and XML techniques
By Jon Udell
February 18, 2005
The instant Google Maps appeared, a lot of us knew right away that we’d
never use MapQuest again. Google’s (Profile, Products, Articles) mapping
and direction-finding service is a stunning improvement.
The maps are gorgeously readable, and they fill as much of the screen (or
the printed page) as you give them. Scrolling the map works in the most
natural way, by dragging the image. The mapping service dovetails with
local.google.com, which finds businesses by city or ZIP code. In
direction-finding mode, each step along the route offers a link that, when
clicked, pops up an enlarged view of the intersection.
What rich and smart client technologies enable this magic? DHTML,
JavaScript, CSS, XML, and XSLT.
As is the tradition when Google launches a new service, curious hackers
immediately took Google Maps apart to see how the magic was done. The best
early analysis came from Joel Webber, who worked out the details of image
tiling, dynamic updating, and route plotting (infoworld.com/2533). Among
other interesting discoveries, he found that the application uses the
browser’s built-in XSLT engine to transform packets of XML received from
the server into search results, displayed as HTML.
This explains why Google Maps supports only Internet Explorer or
Mozilla-based browsers. The others, notably Safari and Opera (Overview,
Articles, Company), lack built-in XSLT processors.
Commenting on Webber’s post, one reader noted that no W3C standard defines
this capability. As is the related XMLHttpRequest object, which enables
the browser to programmatically fetch XML from the server and parse it,
the built-in XSLT processor was a Microsoft (Profile, Products, Articles)
innovation that was later copied by Mozilla. Safari and Opera do support
XMLHttpRequest, by the way, which is why they can run Google Suggest, the
experimental version of Google’s search that dynamically expands partially
typed queries into lists of choices.
The W3C can bless this approach or not, but with Google Suggest and now
Google Maps, Google has thrown down the gauntlet. The modern browser is an
XML-aware client. Savvy Web developers have known about these features for
a while, but now Google has legitimized them and pushed them squarely into
the mainstream. My guess is that we’ll see an explosion of pent-up
creativity as more Web developers discover, and begin to exploit, the full
power available to them.
But wait, there’s more. If you append the term “output=xml” to any Google
Maps URL, the server will send back an XML packet. APIs? We don’t need no
stinking APIs. In 20 minutes I was able to build a proof-of-concept app --
made from snippets of HTML, JavaScript, and XSLT -- that accepts city
names or ZIP codes and displays information about local businesses.
(Unfortunately, the XML feature has since been disabled.)
I didn’t need to publish any new services to do that. Because the app uses
the W3C’s hosted XSLT transformer in tandem with Google Maps, I was able
to “deploy” it in any browser simply by posting an HTML/JavaScript snippet
to my Weblog.
Google Maps’ killer integration hook is the latitude/longitude data woven
into its queries and responses, which can tie into any geo-aware app. We
don’t yet know how Google plans to control or monetize this capability,
but it shows what can happen when all the pieces of Web technology come
together in the right way.
Strategic Developer
Annotating the planet with Google Maps
Open, XML-based design makes it a service factory for the geospatial Web
By Jon Udell
March 04, 2005
My previous column on Google (Profile, Products, Articles) Maps provoked
an unusually strong response. First up was Wil Rivers, who pointed out
that Telcontar’s Drill Down Server is the engine that does the heavy
lifting on the back end. Next was a series of gripes about data quality
and completeness.
“The map location came right up, but the address was off by a half mile,”
one reader said.
“Wake me up when it covers the scope of MapQuest and MultiMap -- i.e.,
this planet and not just one country,” said another.
“There was a road that doesn’t really exist,” yet another said. “If the
database is this out of whack with reality, it’s not going to be very
useful.”
Before I could respond to these points, all of which are completely valid,
Craig Thrall sent me the bombshell that blew up my schedule for the next
24 hours. “A friend of mine figured out how to download Google directions
into his GPS,” Craig wrote, “and also use the Google Maps front end to
display his GPS.”
The friend is Matt King, and his proof of concept is a JavaScript
bookmarklet that uses Google Maps to display a walking tour of Beverly
Hills, with waypoints labeled and linked to photos. If you try it, be sure
to check out the black-and-white bunny sitting on the tree lawn of N.
Rodeo Drive between Park and Carmelita.
I always knew there would come a moment when I had to have a GPS receiver.
This was it. My first thought was to use my LG VX4400 cellphone, which has
a built-in GPS chip. Although Roger Binns has open-sourced every other
aspect of that phone with BitPim, I’ve yet to find a way to display and
remember GPS waypoints. So while I’m not normally an impulse gadget buyer,
I picked up a Garmin Geko 101 and went for a walk.
When I finished making the interactive version of my neighborhood tour,
along with a screencast, it was clear that Google Maps is every bit as
revolutionary as my first instincts told me. Not because Google invented a
new geospatial engine or compiled better data. They didn’t. But simply --
and yet profoundly -- because Google Maps is a framework we can all use to
annotate the physical world.
In the very near future, billions of people will be roaming the planet
with GPS devices. Clouds of network connectivity are forming over our
major cities and will inevitably coalesce. The geoaware Web isn’t a
product we buy; it’s an environment we colonize. There will always be
markets for proprietary data. But the real action will be in empowering
people to create their own services, with their own data, for their
friends, family, and business associates. Google Maps isn’t just a
service, it’s a service factory.
Radical openness is the key. It’s been only two weeks since it launched
and already the colonization has begun. Thanks to open XML data formats
and open Web programming interfaces, people have figured out how to
animate routes, create custom routes with their own GPS data, and display
GPS data in real time.
Microsoft (Profile, Products, Articles) could have enabled these same
kinds of things years ago. Its TerraServer has been up and running since
1998. But despite Steve Ballmer’s infamous monkey-dance chant, developers
haven’t flocked to TerraServer. What’s Google’s secret? Web DNA and no
Windows tax.
10.9.04
A cool demo of mesh networks
Link here
29.8.04
Super cool technique d'enseigner la biologie:
vive technologies inc. virtual in vivo education ] Cellscape Explorer
26.8.04
Trendsetters.com 25-Aug-04: Time Compression, Videogaming, Infantization
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An update from Trendsetters.com 25-Aug-04
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MESSAGE FROM THE EDITOR:
In my speaking journeys, I always touch on the subject of
"Time Compression." This week, we've updated this Metatrend
at the site, but even I was surprised at some of the
evidence uncovered that clearly points to the acceleration
of life.
Did you know that Wagner's ring has sped up by almost one
hour since it was first played in 1876, due to a faster
tempo?
Or that sleep is being affected by Time Compression, with
the average U.S. adult sleeping two hours less each day,
compared to the 1920s?
While that may not be surprising, the National Sleep
Foundation recently reported that even infants now average
almost 90 minutes less sleep a day than the 14-hour
minimum doctors recommend, suggesting that another favorite
Time Compression spin-off, "Darwin on Steroids" -- the
acceleration of evolution, is also coming in to play.
And how about the fact that gift-card sales have exploded to
US$40 billion in 2003, up from $13 billion just five years
ago, because no one has the bandwidth to select gifts
anymore?
I encourage you to understand Time Compression, because it
continues to have a major impact on all facets of life. A
prime example is the collapse of the traditional U.S.
airline industry.
What you are seeing at work is a shift to Time
Compression-driven airlines, like JetBlue and Southwest,
which can turn a plane around in 30 minutes or less,
vis-Ã -vis legacy carriers that work ploddingly slow.
Our conclusion: time is more valuable than money.
Enjoy,
Michael Tchong
Trend Analyst
*HDTV*
Comcast Launches PVR and New Guide
----------------------------------
A lot of people wonder if TiVO's goose is cooked. This week,
Comcast formally announced the national roll-out of its HDTV
PVR, which it will rent you for a mere $10 per month.
Now look at DirecTV's TiVO HDTV PVR, which sells for $1000.
Which would you rather have?
=> http://www.16nine.com
Sony Launches LCD TVs with LED Backlighting
-------------------------------------------
It may look as a typical new product announcement, but the
underlyng Sony message is clear: Let's take the interface
from our super-succesful PlayStation videogame platform and
meld it with HDTV.
The convergence result? A TV that responds much faster to
user interaction through the use of an on-screen menuing
system and joystick borrowed from the PSX.
Oh, and that 46-inch LCD screen with 1080p resolution ain't
to shabby either.
=> http://www.16nine.com
Declining Plasma Prices Fuel 169% Sales Growth
----------------------------------------------
They say that any upheaval provides a great opportunity for
someone to upset the apple cart. Check out who's tied with
Sony for most plasmas shipped? Panasonic.
Expect much more upheaval as the HDTV market becomes a
$70 billion opportunity by 2008.
=> http://www.16nine.com
*Time Compression*
According to the James Beard Foundation, when cream of wheat
was introduced in 1893, it took 15 minutes to prepare. By
1939, it was five minutes. Now, it takes just 30 seconds.
Draw your own conclusions.
=> http://www.trendsetters.com
*Video Games*
Arc Group predicts the mobile game industry could reach $8.4
billion worldwide by 2008, up from about $200 million in the
U.S. and $600 million in Europe today.
=> http://www.trendsetters.com
****************************FLAG****************************
STYLE-VISION ROUND TABLE OCTOBER 2004:
Success, Failure and Passion in a world of Mood Consumption.
The next Style-Vision Round Table, in cooperation with
Financial Times, is taking place October 13-15th 2004 in the
South of France. Several leading brands, creative agencies
and thinkers have already signed up to this exclusive and
intimate forum for shaping and sharing consumption and
lifestyle directions. Make sure you're part of it! CHANEL,
DANISCO, POMPEI A.D.,JOICO LABORATORIES, FIRMENICH,
ALCANTARA, FORTUNE MAGAZINE, SAATCH & SAATCHI,
QUINTASSENTIALLY, NIKE EUROPE BV, ESTEE LAUDER,TOYOTA EUROPE
DESIGN DEVELOPMENT,GAP, ROYAL SCANDINAVIAN A/S, INVISTA,
WGSN, FIAT, CHRISTIES, SELFRIDGES and the V&A MUSEUM are!
Visit http://www.style-vision.com for more info.
************************************************************
TRENDWATCH
*Marketing*
Everyone wants to be cool. Tylenol is using street teams to
market its new Tylenol Cool Caplets, which provide an
"instant cooling" of your hot headache. Agency Deutsch,
armed with data from trend consultant Faith Popcorn, has
deployed 90 attractive women, clad in low-cut, white velour
outfits with fur trim and known as the "Tylenol Cool Caps
Girls," to distribute samples in six markets, including New
York, and where else, South Beach.
=> http://tinyurl.com/46572
*Media*
Sanford Bernstein predicts that by 2009 cable networks will
peak, collectively attracting about 57% of prime-time
viewers, up from 53% in 2004 and 43% in 2000. That forecast
does not sit to well with the cable industry.
=> http://tinyurl.com/4v7mo
*GUEST TAKE*
Infant-asy
----------
by Deborah Murhpy
There is a socio-cultural trend towards "infantization,"
which offers opportunities for product development and
marketing in an unlimited number of fields.
The inevitable outgrowth of Casual, Complexity Nervosa,
Fountain of Youth, Infant-asy captures the need to behave
like an infant, and to embrace products, services and venues
that support that demand.
Consider these reversions: On-demand feeding, those
ubiquitous water bottles with nipples. Pampering and
comforting, like being wrapped at day-spas or relying on
in-home massages, or wearing pajamas day-in day-out, at home
and in public.
Sitting in an "infant-seat," recliners/loungers with built-in
food and drink holders. Seeking baby-soft skin, i.e. no
wrinkles, and removing body hair, wearing little tees or
chenille, flannel and fleece. Expressing unfiltered raw
emotions, like those crying and shrieking fits on
"confession" TV.
Relying on grown-ups like Martha Stewart, while refusing to
be a grown-up: voting for American Idol, but not registering
to vote. Buying robots for companionship and amusement. Being
under surveillance 24/7 to insure safety and confirm location.
Infant-asy provides many opportunities. Consider the
burgeoning demand in personal caretaking, like picking up dry
cleaning, groceries or getting a pet to the groomer. Or the
emerging market for soothing sounds. There is also more room
for games activated by touch, like in waiting areas where
advanced equipment distracts by providing on-demand Solitaire.
How about more tactile products with light and sound? Or more
ubiquitous playpens? Even more versatile strollers, think
golf carts, should be developed and marketed to wanna-be
infants who have given up the desire to walk anywhere.
The opportunity to market to Infant-asy will exist for at
least five more years. In the meantime, observant marketers
need to remember what happens when infants mature and demand
independence, individuality, power, influence and
self-expression.
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............................................................
28.7.04
Networking Home Entertainment Systems
Networking Home Entertainment Systems
July 28, 2004
Last month, Ipsos-Insight surveyed US adults to get a sense of their desire for what the research firm termed "digital dens" — the connection of home entertainment systems to the Internet.
While exactly 72% of respondents showed an interest in such a product, a number of them still posed concerns regarding brand compatability and setup being too complicated. (See eMarketer's earlier coverage of this report in "Merging Couch and Mouse Potatoes".)
This month, Ipsos released more information about the study, concentrating on the specific brands US adults would trust to deliver "digital dens" successfully. Over 40% cited HP and Dell as brands they would trust and over 50% cited Microsft and Sony. Exactly 34% cited Panasonic as a brand they would trust as a "digital den" provider, proving that consumers are not leaning toward one specific industry to succesfully provide them with the products and services necessary to connect home electronics to the Internet. The opportunity exists for a number of verticals, including consumer electronics, ISPs, PC vendors, cable companies, wireless service providers — even Google was named by 13% of respondents.
Furthermore, broadband service providers could benefit from a growing desire to connect home entertainmet systems to the Net. Ipsos also found that 43% of adults without broadband Internet say the availablilty of "digital den" technology would have "some" impact on getting them to migrate to broadband, while 23% say it would have a "great" impact on their migration to broadband.
For a complete picture of the future of "networked" homes, read eMarketer's spotlight report Home Networks: Converged Devices Yield a New Platform.
19.7.04
Partager une station de radio invididuelle: c'est possible avec Yahoo! Launchcast... Voici ma station: http://launch.yahoo.com/lc/?rt=0&rp1=113880&rp2=1386870329
The Grand Unified Theory of Media
http://www.alwayson-network.com/comments.php?id=4908_0_8_0_C
The Grand Unified Theory of Media
Where'd I put that CD again? With the right technology, who cares?
Rafe Needleman [AlwaysOn] | POSTED: 07.19.04 @00:46
Convergence, hah. Right now, I'm suffering from massive media divergence.
I've got TV shows on my TiVo, photos and some videos on my PC, different
MP3 tunes on my laptop and my desktop (not to mention on my portable MP3
player). So when I want to find a particular piece of media, I don't know
where to start.
The brute force solutionâcopy everything onto everythingâdoesn't work,
since aside from the desktop PC, no device has enough space to store it
all. And anyway, even if I can find the right file, chances are I can't
play it where I want toâI haven't yet found a satisfactory solution for
getting my video files onto my TV, and if I'm on the road and want to
listen to an MP3 that's back home on my PC, forget it.
Microsoft is of course trying to solve this with its Media Center
software, and Apple does a good job as well. TiVo is even in the game. But
with these mainstream solutions, once you leave the home network, you are
on your own. A few different startups are tying to integrate all of a
user's media files. Of these, one of the most interesting is AllMiMedia.
The demo I got, by CTO Luc Julia, was impressive. On a table at Starbucks
he had a laptop, two mobile phones, and a Wi-Fi PDA, all of which, at one
point during our conversation, were playing or displaying Luc's media.
AllMiMedia is based on a core that runs on a PC, which users leave on all
the time at their home or office. This PC reaches out to all your media
storage and playback devices, and lets you play anything anywhere. It
handles all the transcoding for you, too. For example, if you want to view
a 5 megapixel photograph on your mobile phone, the software will first
convert it into a small phone-sized image before it transmits it.
Likewise, the system will transcode audio and video before streaming the
files to remote devices.
The system can also control other devices. With it, you can set your TiVo
to record a show, or turn on a light in your living room (using X10 home
control technology) And if you plug a new media source (like a camera)
into your PC, you can immediately see its output on any device, like your
TV or your mobile phone.
AllMiMedia (the name may change before the product is released) also lets
you program stock or weather tickers into the system that you can view
anywhere. And a lot more. Actually, since it gives you access to your main
computer from just about any device anywhere, AllMiMedia reminds me more
of computer remote control solutions like GoToMyPC and LapLink Everywhere
than of other media products.
Eventually I had to end the demo so we could talk about the business. And
that's where things got difficult. VP Joe Harris cringed slightly when I
brought up the problems TiVo had early on with consumer education. TiVo
was (and is) a great product, but initially consumers just didn't get it.
Joe was at TiVo, it turns out, and is familiar with the heartache of
explaining a new idea to a potential customer base that's just not paying
attention.
Still, there are many potential customers for this type of product: cable
operators,wireless operators, online portals, you name it. Everybody in
consumer technology will at some point want their service to become the
touchpoint for managing digital media, and AllMiMedia could be a good
foundation to build on. Considering how many people will eventually want a
consolidated way to manage their media, the potential opportunity is huge.
But AllMiMedia, if it succeeds, will not be a consumer brand.
13.7.04
Vous voulez un PVR? Vous avez besoin de ceci: SageTV EPG Plugin
Ca ressemble a un lecteur DVD... Mais c'est un PC
The HTPC Store: SilverStone Lascala SST-LC02 S HTPC Case. Silver
29.6.04
Wow! un nouveau GPS... Le "tomtom"! TomTom. Software for mobile devices. Flash
25.6.04
Mon prochain téléphone!
Nokia - Nokia 6630 - Phone Models - Phones
18.6.04
Mon prochain téléphone! Caméra, MP3, toutes sortes de programmes, il n'y manque presque rien... à part la radio FM!
infoSync World : Preview: Nokia 6630
17.6.04
Une excellent façon de trouver un point d'accès Wi-Fi pour un ordinateur portatif.. rapidement...
WiFi Seeker
14.6.04
Replacer un VCR avec un ordinateur? C'est possible!
Build Your Own PVR :: Why Tivo When you can Freevo?
9.6.04
Le Tivo le plus avancé: HDTV, et bien plus pratique qu'un VCR
HR10-250 Review
Un super Receiver Audio/Video: on peut le mettre à jour avec les nouvelles technologies quand elles deviennent disponibles...
Onkyo TX-NR1000 Receiver with THX Ultra2
Une façon excellente de partager photos, MP3s, et la télé
Roku
5.2.04
"How can a company integrate the legacy of consumer electronics with the modern pace of computing? One way is to use newer technologies to control—not replace—older devices. This is what startups DigitalDeck and OpenPeak are doing."...
Rock The House :: AO
7.1.04
Le futur des stéréos?
Ce système permet de faire une connection entre l'ordinateur, la musique MP3, la radio Internet, et le stéréo
Turtle Beach Connected Audio - AudioTron
4.1.04
J'ai décidé d'essayer le format "blogue" pour mettre certaines informations sur le site. Je ne suis pas encore certain de l'utilité de cette fonction, mais nous verrons bien! Le site www.blogger.com peut vous donner une idée de ce qu'est un blogue, et à quoi cela peut bien servir....
