Weekly Links (Week of Jan.4, 2010)

During our program, I used to annoy my classmates by constantly sending emails pointing to various links, stories and other content that related to the topics being discussed in class. In hopefully a less annoying manner, I plan to bring that content to this blog on a weekly basis.

One of the things Ram Baliga told us was that analytics would become one of the cornerstone technologies that MBA's should master in the 21st century. Here is a good write-up on the proliferation of data that is now available for analysis and how it will shape the future of business.

With Chet Miller we evaluated various employee evaluation models, including GE's A-B-C player model. This link explores NetFlix model of trying to hire, retain and compensate almost all "A" players and whether or not that is a good thing.

Following up from our case discussion about NetFlix and their eventual migration to a streaming model. Many elements at play here: short-term vs. long-term profits; customer input vs. decisions that lead to eventual business model changes; decisions that could lead to loses due to digital piracy or alternative models solving a customer demand.

This article explore the Nexus One phone from Google, in the context of how it will impact Google's overall strategy. VC Brian Gurley does an excellent job of looking at the broader impact of this device, but more importantly the strategic impact of the new business model. The Nexus One was an area of highlight in the final Global Strategy paper that I wrote with Ric Freeman and Wendy Perry.

Here's another Nexus One link that follows-up some of the cases we analyzed, including strategic challenges for HTC, Taiwan Semi-Conductor and Google. At least within the technology world, the spread of coopetition and partner/rival scenarios will continue to expand as the value chain is twisted in all sorts of new ways.

Stan Mandel taught us the underlying structures for funding and operating and entrepreneurial venture, but more so he focus on the mindset needed to be a successful entrepreneur. VC/Entrepreneur Mark Suster explorers his views of the characteristics of successful entrepreneurs.

Open Technology

Recently, Google posted a blog where they provided Google's definition of "open". In that post, there was an interesting section about how open systems can be viewed by people with traditional MBA training.

"To understand our position in more detail, it helps to start with the assertion that open systems win. This is counter-intuitive to the traditionally trained MBA who is taught to generate a sustainable competitive advantage by creating a closed system, making it popular, then milking it through the product life cycle. The conventional wisdom goes that companies should lock in customers to lock out competitors...."

Most of my working career has been centered around an "Internet DNA", so maybe I'm overly biased, but this is a comment that I made to my classmates time and time again as we studied different scenarios and cases during our program. The numbers are fine, and thorough analysis is necessary, but too many times it leads to decisions that don't result in driving new customer value. It results in decisions that create short-term advantages, or temporary "wins", but it often misrepresents whether or not a company is truly prepared to be competitive in the market, and how they can position themselves for the next opportunity.

The 21st century is not going to be about long-term sustainable advantages. Advantages will be short-lived, and the companies that survive and succeed will be those with a open mindset that encourages competition. Competition drives innovation.

Competition also makes some people &/or companies uncomfortable because they were built around an inflexible model, or one that doesn't allow for radical changes in the market structure. Google is an excellent example of a company that is constantly trying to change the dynamics of markets. They are not always right, and actually fail quite often, but their culture and business are built on the foundation of competition. Many companies would do themselves a favor by studying Google and adopting their mindset to open systems.

Wrapping up the Program - Part I

As of 1pm, barring any last minute disasters (not sure what they would be), my journey through the WFU Executive MBA program is complete. Our final grades were posted today. All that's left now is to receive my diploma at a ceremony in January.

As the last group to ever go through the Executive Program, the ending is somewhat bittersweet (the format was canceled in Fall 2009 due to strategic changes by the WFU Schools of Business). Being EOL brought us closer together as a group, but unfortunately we won't have subsequent classes to build the alumni base. The Executive program was started over 25 years, and was the original MBA program offered by Wake Forest.

Instead of just waving good-bye to this blog, I thought I'd finish it with a series of posts recapping some of the most important things I learned over the last 18 months.

Breadth of Knowledge Matters

Whether you're faced with a Strategy problem, a Marketing problem, a Finance problem or an Organization problem, no decision can be made in a vacuum. Having a fundamental understanding of a breadth of subjects, learned across a wide range of industries (through case studies, classmate experiences, etc.) is invaluable in making executive level decisions. Today's markets move much too fast to build companies that operate in silos, so bringing a breadth of knowledge to daily decisions will make the difference between survival and failure in the 21st century.

The World is Global...and Semi-Global...and Regional...and Local

While the Thomas Friedman's of the world grab many headlines, not every problem today is global. It is invaluable to have the experience of visiting and working in international markets (which we experienced), but knowing when strategy needs to be global is even more valuable. You must be ABLE to step out of your CAGE and see where it makes sense to bring ADDING solutions to market expansion. You must think globally, but act locally.

Create True and Lasting Value

As we saw from the financial crisis of 2008, and in numerous other examples, it is incredibly easy to financially engineer the books or manipulate markets in the short-run in return for near-term profits. But the 21st century, with it's hypermedia cycles, will quickly destroy companies that are not competitive and do not create true value for customers or partners. NOTE: "Lasting" is a relative term. It may only be 3-5yrs, but it's a mindset that should be infected into every company that strives to be competitive and differentiate themselves by creating tremendous value with their products and services.

Think like a CEO

All too often we tend to get caught up in the value of our functional area or market, and fail to see the bigger picture in front of us. Without the correct strategies, financial models and product portfolios aligned to solve customer problems, many ideas are just a set of random details.

Think like a Baby

At times, we plug all the data into our fancy MBA models and answers emerge. But do they always make sense? Have they taken into consideration local factors, or basic inter-dependencies? Have we thought through the simplest of details, asked the simplest of questions? For parents, we're often amazed at the way children are able to ask the most direct questions for complex topics. That type of questioning is valuable for executives as well.

Build Your Personal Brand

The personalization of media and the ubiquity of the Internet allows each of us to be our own Marketing/PR/Ad agency. Companies will come and go, but your personal brand is the one element over which you can have direct control. This blog was created for alternative learning purposes, but it eventually became a foundational aspect of me beginning a journey to better understand how a personal brand is built, cultivated and expanded.

Free'er than Freemium, "hmm....BUT...."

I've written about Freemium several times before, discussing it's impact on existing markets and incumbent companies in several industries. Brian Gurley (Partner, Benchmark Capital) does an excellent job explaining how Google is further leveraging their mobile services like StreetView to further move into Mobile Advertising.

As an MBA student, Google is an interesting company to study and analyze. On one hand, so many of their projects are difficult to apply typical MBA skills to (NPV, Cash Flow analysis, etc.) because they are fundamentally experiments, and they make not drive direct revenues. On the other hand, their ability to expand upon their core strategy of "organize all the world's information" is incredibly interesting to follow. It is a massive concept that has so many possibilities, but I suspect it only works within a culture that allows large amounts of freedom to explore "crazy" ideas.

Having a cash cow like AdSense or AdWords obviously makes it a little easier to fund and maintain the Google culture, but it still requires employees and managers to take huge risks. Personal risks, technology risks, strategy risks.

I'm trying to imagine what a conversation at Google a few years ago might have gone like:

Employee: Mobile devices are going to take off and people will consume huge amounts of data on them someday.

Manager: Agreed. We should figure out ways to accelerate this, as we could drive ads to their mobile devices.

Employee: My kid was reading about Lewis & Clark the other day. We should try and be the world's source for mapping information.

Manager: But what can we do interesting with maps?

Employee: Eliminate paper maps. Make maps that move with the touch of a finger. Show live traffic overlaid on a map. Street-level views. Open it up to any location-based service (voting, gatherings, flu outbreaks, restaurant listing, etc..)

Manager: How might we do that, besides buying mapping data?

Employee: What if we had a fleet of cars that drove around the country with a camera on the back? We could pay high-school kids, college kids, starving artists, or anyone willing to drive around?

What would your manager have said at that point in the conversation? Would it have started with something like, "Hmm, interesting.....BUT....". I suspect that in most companies it would. At Google, I doubt there are many "hmm....BUT...." moments when ideas are being formulated.

Imagine the possibilities at your company if you had the ability to hire really smart people and not feel like you had to "hmm..BUT..." them all day long.

Question of the Week - Where's your next emergency?

During these challenging times, it's often difficult to focus on anything but survival. How to keep today's customers; how to make this month's payroll. Seth Godin's recent blog, about realizing game changing trends, got me thinking about what my company needs to be thinking about as we adapt to the "new normal" that comes out of this economic crisis.

I always like these types of exercises because not only do they force you to focus on what could completely change/destroy your current company, but it typically also leads to some thinking about how to create a company that could bring about that emergency. Especially in the technology world, the barrier to create that emergency is becoming lower and lower.

Killer Question - Could you customize a mass product?

From Phil McKinney's Blog, 

"When things get tough, the common reaction is to scale back and standardize the processes.  The objective is to take costs out of the business.  What would happened if you went the opposite direction?  Rather than standardize, why not customize?"

This is an interesting question for me, since my company mass produces a product that is "customizable" by our customers through software configuration.  This isn't really an aftermarket for our product, since the product isn't immediately useful in it's default state.

But if I had to think about ways that our product could be customized, the list might look something like this:

1. We could allow customers to upload specific configuration options to their order, and we'd load those before the product was shipped.  This might make it easier for them to deploy the products in remote offices without sending a specialized technician to the site.
2. While it wouldn't enhance the functionality of the product, we could offer options on the color of the faceplates on the products.  Some companies have corporate colors (ie. Yahoo - purple, UPS - brown, Wake Forest - black/gold) and this might be a desirable look in their data centers.  
3. if our selling partners identified their primary target markets, we could potentially create collateral (training, co-logo'd whitepapers, etc.) that aligned with those segments.  This would reduce their costs and increase their focus, and we could probably do it with minimal additional costs.

This is an interesting exercise, because while some these ideas could change the overall experience, they also introduce additional conflicts or problems (distribution, etc.).  I need to think about this some more, to see if there aren't more obvious or impactful ways this could be applied to my company.  I may find that this exercise works better for new companies looking to create a niche (or adjacency) to an existing market, rather than trying to change an existing product/service mix.