Archive | January, 2010

The tension of creating vs maximizing

I’m about half-way through “The Design of Business” by Roger Martin which explores how knowledge advances from one stage to another-from mystery (something we can’t explain) to heuristic (a rule of thumb that guides us toward solution) to algorithm (a predictable formula for producing an answer) to code (when the formula becomes so predictable it can be fully automated). As knowledge advances across the stages, productivity grows and costs drop-creating massive value for companies. p18-19

He talks about two of the models companies operate under, exploitation and exploration.  To paraphrase companies that operate under the exploitation philosophy will analyze a set of resources and their strategy will be to squeeze every drop of revenue and subsequent profit out of those resources, think of these companies as super efficient.   Companies that adhere to the strategy of exploration will purposefully step of the path of their current success to analyze the market, the customer and seek to discover new products.  Exploitation is a strategy that reaps tremendous benefit – and then seemingly overnight the cash cow runs dry.   Exploration bears almost no fruit in the short-term and can command equal resources without benefit – then seemingly overnight it turns into a rock star.

(Needless to say, because of the fiduciary responsibility most public companies adhere to exploitation vs exploration.)
While reading that, I came across this article on Slate.com profiling Jeff Bezos, Founder/CEO of Amazon and the Kindle.  Below is what he had to say about Amazon (and the creation of the Kindle).

 

“There are two ways that companies can extend what they’re doing. One is they can take an inventory of their skills and competencies, and then they can say, “OK, with this set of skills and competencies, what else can we do?” And that’s a very useful technique that all companies should use. But there’s a second method, which takes a longer-term orientation. It is to say, rather than ask what are we good at and what else can we do with that skill, you ask, who are our customers? What do they need? And then you say we’re going to give that to them regardless of whether we currently have the skills to do so, and we will learn those skills no matter how long it takes. Kindle is a great example of that. It’s been on the market for two years, but we worked on it for three years in earnest before that. We talked about it for a year before that. We had to go hire people to build a hardware- engineering team to build the device. We had to acquire new skills. There’s a tendency, I think, for executives to think that the right course of action is to stick to the knitting—stick with what you’re good at. That may be a generally good rule, but the problem is the world changes out from under you if you’re not constantly adding to your skill set.”

 

I love the convergence of learning, and here is Jeff Bezos talking about their strategy “rather than ask what are we good at and what else can we do with that skill, you ask, who are our customers? What do they need?” which is a near perfect example of an exploratory strategy.
I love it.
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What Google’s Nexus One means to your organization

January 5, 2010 is the day Google launched its first consumer physical device, the Nexus One – a phone.  In geekdom it is quite the popular topic, trending on twitter as well as the chiming of every major tech site to post review.  Here are some of the posts.  TechCrunch, GigaOM, Mashable, Engadget, Gizmodo, gdgt and BGR thoughts which review the physical phone itself, the software (Android 2.1), how it compares with the iPhone and how the launch of the Nexus One wasn’t the paradigm shifting event for mobile phone salvation we expected. I promise you they all cover each of those matter far better then I can, especially since I haven’t had a loaner phone for weeks preceding the launch – nor do I have one now. Instead let’s talk about how this will affect your organization. If you’re thinking, “my organization isn’t techie at all,” then this is for you.

Increased Validity of Android - for all intents and purposes Google’s launch of the Nexus One with T-Mobile (and upcoming Verizon) will place its open source operating system Android in the hands of non-Geeks.  This is a big deal as there are far more people that will like Android because they can get free turn by turn directions on the Maps then the people who will like the Nexus One because it runs the 1GHz Qualcomm Snapdragon processor that facilitates maps happening in glorious bliss behind the scenes.  This will also spearhead the wave of Android phones that are coming from Motorola, HTC, LG and others in 2020.

Spread of Smartphones - because there will be more of these bad boys in the hands of non-early adopters as they upgrade with their current carriers which will spark a couple key things.  First, your website will need to become mobile friendly pronto – it will no longer be seen as an option to have a mobile optimized site.   Second, the Android app market will see a signifiant increase from the 10,000 it has today as consumer programs will come out of the woodwork like they did for iPhone and organizations like yours will begin to build and launch apps for your consumers.

Rise of the Engaged consumer – we will continue to see the rise of the always on customer.  What this means for you is that their questions, comments and concerns will come to you faster and from new locations then you’ve seen before.  Perhaps more importantly their expectation of your prescese and response will reward those who are ready with open arms to customers who want to talk.  This will also open up new channels of communication and opportunity to connect with your customers, which will be scary but will make you a better organization.

For many, a phone with Android will be the very first time they’ve used open source software as part of their daily life and with Google’s support I think we’ll see it continue to grow in market share on new devices which will drive app invovation.  By far the biggest effect you’ll see is that your customers will have smartphones and while they all won’t know how to use them, they’ll do a few things well and that will disrupt your current business practices.

A few concrete examples, if you’re a

  • national retailer – make it easy to order online via mobile
  • brand with lots of locations – make it easy to find and contact them
  • local church – show sermon notes or bible passages during services
  • non-profit – use your mobile site to showcase your work and align volunteers with places to serve near them

These are just a few ideas.  You’re bound to have a few that are key for your organization, find one or two and get the strategy mapped out.

The launch of Nexus One is the ushering of mobile data into the hands of the masses and that will rock your world in 2010.  Launch with it.

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