Noodle on this for me

What is the difference between “innovation” and “invention”?

I asked everyone I met after attending a presentation in Philadelphia this last week. And the answers were fascinating but the best answer by far was …

Invention turns cash into ideas.
Innovation turns ideas into cash.

At BizCampBelfast this is going to be my theme for my presentation. I’d welcome any thoughts you have so that I can incorporate them into my talk and I encourage you to bring your ideas to the session to share with everyone there.

Days to go! I’m excited.

November 1, 2010 at 4:45 pm | Business and Technology | No comment

Time to rethink how we treat the customer

I have experienced a number of interesting stories about customer service in the last few days and I am fast coming to the conclusion we may need to fundamentally rethink our approach.

Recently a friend went into get a free phone upgrade. She couldn’t be given the phone because the accounting system wasn’t able to deal with €0.00 transaction. My friend pointed out, from her years of accounting, that a €0.00 transaction doesn’t affect an accounting system! Alas too logical. After some back and forth she decided that O2′s logic could only be modified with a sit-in. The threat was enough, O2 gave her her upgrade and she is now the proud owner of a new iPhone.

End of story. Alas no.

She then tried to connect her email which runs in SmarterMail. Yes, this blog post is going to shame the shameful, which she easily connected to her BlackBerry (kudos to RIM). After she struggled to connect her iPhone to SmarterMail (which out to be smarter!) I tried to do it and, three hours later, managed to make the connection. That was after failing to get any help from (more shame coming) Apple, Google, Yahoo, Bing and SmarterMail. All they had to offer was information from 2008. Finally trial and error and 30-years of tech experience solved the problem.

Can we agree on some things people?

Why do we enshrine the most detailed and complex set of business rules into multiple layers of technology and completely eliminate common sense and dis-empower the people operating these systems from overriding the stupidity and doing the right thing for the customer?

As Seth Godin said in his blog this morning. “What makes a celebrity special? … It’s exciting to shake hands or get an autograph from a famous person … you’re getting a slice of attention from someone who has other options. … Your customers too. They’re famous now. Time to start treating them that way.”

Time also to rethink the blind logic, strict adherence to policy, practice, procedure, process and all those other pesky, pissy details that get in the way of common sense.

Why is it that, as a supposed engineering discipline, we think the word “standard” is a plural. Can we agree that somethings will be standardized. Cell-phone chargers do not need to come in 50 varieties. Apple computers need to have a VGA output. And connecting to email servers should require email address, password and URL and the systems should work out everything else. The only Port Number I care about is the year it was bottled!

So, are we all agreed? If you bring out new stuff you need to pass the following tests:

1. Does it make my life easier?
2. Does it work (without me doing anything) with ALL my existing stuff?
3. Can I download it, install it, configure it, use it without studying computer science, without calling a friendly geek, without answering silly (or incomprehensible questions) and without losing hours of my life that I will never get back? … and … and this is the biggy
4. Will I GAIN hours of improved lifestyle because of it?

If the answer to any of those questions is no – don’t release it – it is Beta and you should never practice on the paying public.

Empower Change in the way you treat the customer – put them first – make every interaction a delight – not a disappointment.

October 18, 2010 at 3:15 pm | Business and Technology | No comment

It’s just business

When customers come to visit us I am always interested to know why they choose our venue over theirs. Usually they just want to get out of the office and today is Friday after all. Today’s visitors were here for an altogether different reason. They wanted to see how “real” we were.

You can tell a lot by being in someone’s office. You see how busy they are, how they interact with team members, bosses, employees. You get an impression of how they organize themselves and what their organizational status is relative to others. And we learn all of this, as Malcolm Gladwell pointed out, in a the “Blink” of an eye.

During our 3 hour meeting a very interesting topic came up. We were discussing our corporate philosophy of “never let a customer fail”, which was handed down to us from a former CEO Michael Capellas, and we were describing how we view our customers as business partners. As an organization we strive to develop an intimate relationship with our customers and learn, in detail, about their business operations so we can better support them with our products and services over a long period of time. We do this because customers are hard to get and easy to lose; but most of all because, in our business model, 80% of the revenue we get comes in the years after the initial sale.

Our visitors thanked us for trying to be better business partners but asked us not to try too hard!

Their practice, they told us, is to engage with vendors in short 1, 2 or 3 years bursts. They do this because their own corporate strategy changes dramatically and regularly and any period of time over a couple of years is utterly unpredictable. Any products and services they may be using today may no longer be relevant 1, 2 or 3 years down the line.

They also know that their suppliers’ strategies will evolve over time and may not necessarily meet their needs in the future. Competing solutions will come along that will streamline how they do business and they want to be agile enough to be able to abandon one set of technologies in favor of another. And they want to be able to do this without feeling tied to a vendor out of some misplaced sense of loyalty.

“It is”, as they put it “just business”.

Now this is a remarkable corporate philosophy. Normally we try to control our suppliers and force them to meet our prices and specifications and time-frames in exchange for long term contracts and guaranteed annual revenues. But here this client is saying, we will pay whatever you ask that is reasonable, we will exploit your technology as long as we think it suits our purpose and when it doesn’t we will pick something else.

What is in it for the client? Well it means that know something better is going to come along eventually and they run their business on the basis that when it does they will not hesitate to embrace it. They are immune to ROI (Return On Investment) calculations that extend out to 10 years because they can barely see beyond 10 months. If you want to sell something to them you better have a pretty great case for delivering value fast: out-of-the-box in fact! And they know their business competitors are likely to stick with older technologies because it is very hard to sell replacing something your implemented less than 24-months earlier. This gives them a very significant competitive advantage.

To have all of this ingrained into the corporate culture is nothing short of remarkable.

And what about the vendors? We all need to understand that if we get kicked out and replaced by the latest technology or product or service, it wasn’t anything personal. When we’re negotiating we can ask for reasonable prices for our stuff and we do not have to discount in the hope of getting the revenue back in the long term: because there will likely not be a long term. We also know that if we are the incumbent supplier for more than a couple of years our competitors are still behind us technologically: and we also know if we get replaced we need to bring our stuff up to date fast as the competitors passed us!

How would you deal with this kind of customer? Would you have the confidence to say “if I lose this customer it is because the market changed and I didn’t – and I better do something about that quick”? How many of these kinds of customers do you have today and you don’t know it?

Could you be this kind of customer? Are you able to have an emotionless relationship with the people who provide you with goods and services so that you can say to them “what you provide is what I need today and when I find something better I will move to it”? How many of your suppliers do you keep because they are personal friends, how many suppliers do you ignore because they simply compete with your friends?

If you are in business to make a living you have to choose what is right for the business, not what is right for your friends and family. Next time you choose a business partner, a customer or a supplier ask yourself “am I attached to the value they bring or the am I attached to them?”

After my visitors left today I was ready to Empower Change in my organization and liberate our own thinking about what it is to be a customer and what it is to be a supplier. I am revisiting all of the partners I work with and asking “are you doing the best for my business?” It is going to be very interesting.

August 21, 2010 at 3:03 am | Business and Technology | No comment

Free trade but not free speech

The European Union of 27 member states, home to the Euro, soon to be the world’s most important currency, with free trade enshrined in its constitution has one serious handicap to pan-European business: roaming charges!

How is it that as I travel across the United States I do not pay roaming charges from “sea to shining sea”, nor in any of the US territories from the Virgin Islands in the Atlantic to the Marianas in the Pacific. But if I live in Dundalk and go to the Sainsbury’s in Newry and my kids phone me to remind me to get Wine Gums those Wine Gums end up costing me 4 times as much due to roaming charges.

When I travel in mainland Europe for one week my monthly cell phone bill increases 500%. Recently one hour long conference call, to an 0800 number no less, cost me over £50.

The European Telecoms Commission have made a great start with the capping of roaming and data charges as of the 1st of July. But it is not enough. I hear pleas from business people all the time that is is becoming a significant source of cost – unless you are O2, T-Mobile, BT and the like in which case it is a significant source of revenue – and is exactly the kind of thing that the European Union was meant to stamp out to ensure free trade amongst the member states.

According to the EU, “In economic terms, the telecoms sector is one of Europe’s most important, with annual turnover of around €290 billion, and around 4% of the jobs in the Union.” They claim that “The price of telecoms services have fallen, on average, by around 30% in the past decade” but that has not been my experience.

For all of us I know we’d just like to eliminate roaming across the island of Ireland but I want you think bigger. This is a pan-European problem. I was reading Seth Godin’s blog today and he said a simple thing: “When using an axe to split logs, it’s awfully tempting to aim at the top of the log … the best approach is to focus on splitting the bottom of the log. Split the bottom and the top takes care of itself.” Maybe roaming should be eliminated globally.

We own the airwaves: why do we  continue to pay more to use them when we are not at home? We need to Empower Change in the European Union and eliminate this cost of doing business.

August 19, 2010 at 1:08 pm | Business and Technology | No comment

Disruptive Innovation

Disruptive innovation sounds like a contradiction. It is a way of thinking that changes how we see technology. It makes us rethink how we apply tried and trusted practices and it usually shatters our assumptions, lowers costs and increases revenue … oh yes, and terrifies competitors.

This week I want to talk about data. To misquote Samuel Taylor Coleridge: “data, data everywhere and no one stops to think”. The Ancient Mariner was surrounded by water he could not drink: we are surrounded by data we do not exploit to the fullest. There are three opportunities with data and each, in its own way, is highly disruptive:

Whose data is it? This is not so much a question about where the data came from (though that in itself is a worthy subject for a blog post) but who owns the data? We have developed a very secretive mentality about data, and for good reason. Much of the information stored on servers today is confidential, often subject to regulatory restrictions and sometimes personal in nature. But what about the business data?

Let’s think about an example: imagine that your computer systems maintained your inventory levels for the raw materials of your business. You would use this information to plan when to order more supplies. It would trigger your negotiation process with your various suppliers and you’d place an order with the one offering the best price/service/quality/delivery characteristics. Then a month or so later you’d do it all again.

Disruptive innovation: what would happen if you let your suppliers have access to your inventory of raw materials? They would now be able to predict when you were about to reorder and, instead could come to you with their price before you ask for it. In fact they could manage their inventory based on the rate of consumption of your inventory. This means they could get better prices from their suppliers and pass this along to you. They could also use the data offer to top up your inventory with lower volume but at high volume discounts when they were cash strapped and did not want to wait until the end of the quarter for your order. Everyone wins. Why is our inventory level a secret from our suppliers?

Who controls the access to the data? Usually ICT does: but why? Surely the data belongs to the business and ICT are the custodians and control access on behalf of the business. The business should determine who has access and the business should specify what access they want. ICT should provide that in a form that can be easily consumed by business users.

Let’s think about an example: Why don’t we let marketing do programming? Well this is a silly question really. Of course marketing can’t do programming! ICT does programming and marketing does … well no one is really sure what marketing does; we just know they run the website. But the website is made by programming HTML (etc). So why can’t marketing have access to all the business systems for incorporating directly into the website? If you, or someone in your marketing organization, wants to let people order your products and services from the web why not let them?

Disruptive innovation: It is their data, their systems and their business. ICT has to get out of the mindset that says they own all software development. Patently that is not true. Have you seen the kind of spreadsheets the business is using today? A disruptive innovation is one that empowers the business to exploit technology without asking for permission, what Alan Davidson of Google called “innovation without permission”. This empowerment means that the business can solve some of their business issues through empowering technology provided by ICT without getting an ICT project spun up.

What is the next killer app? Most business users are very familiar with using Microsoft Excel. In fact they excel at it (sorry – just too easy). The problem with almost every spreadsheet is that the data it contains is static, it is a snapshot in time of the data as was. Invariably some person dedicates their life to keeping the data up to date by copying it from some existing business system. The next killer-app is one that allows MS Excel to feed off live business data. So as you look at the spreadsheet the numbers are moving in real time! So where is this app?

Let’s think about an example: Next time you present your figures to the bank manager, or the board, or your shareholders ask yourself this, “Are data that are a month old good enough for this audience?” If the answer is “no” think about how you could present live information, up to the second, to your audience. Think about all of those government studies that are decades old that we use to make investment and funding decisions upon. If only we see the current situation as it is happening. Paul Ottellini, CEO of Intel, said that the next thing to be obsolete will be “Ignorance”.

Disruptive innovation: demand that all data that is displayed in every situation represent the current situation. Prohibit users from copying data and showing a moment in time to make their decisions. get users used to the idea of numbers that move, trend up and down, have seasonal, even hourly variations. Unless you can feel the heart beating in your organization you will never know how it really works. Once you a plotting the patterns you can see how the changes you make, the decisions you make, affect your business. When the bank manager asks you what your income show him that it just grew by 2% as he was asking about it. Now that would impress the heck out of me.

Putting control of, access to and a way to consume data in the hands of business people is Empowering Change that lets them run their business. Our job in ICT is to make this possible and to do it in a way that is secure, scalable and compliant: but it is our job to make it happen.

August 10, 2010 at 4:33 am | Business and Technology | No comment

Naughties, teenies and millennials

When someone says “in the roaring 1920′s” we can immediately relate to the era of speakeasies, dancing the Charleston and silent movies. My question is though: what was the decade before that called? I ask because we will soon be at the end of the same decade in this century and it needs a label. Not just “roaring” moniker for the decade of 9/11, 7/7, Iraq, Afghanistan, Wall Street crash, Saville Report, Bhutto and the thousands of other events that have shaped this decade but what do we call the decade of 1901 to 1910 and 2001 to 2010? In the absence of anyone stepping up I’ve picked “naught-ies”. I tried the “oughts” and “zeroes” but they didn’t seem right to me.

And what has been happening quietly in the “naughties”? In September 2000 a generation of young people entered their secondary education: that same group graduated from university this spring. In 2003 MySpace entered their world, 2004 Facebook, 2005 Bebo, 2006 Twitter, iPhone 2007: this generation of young people, the “millennials”, have integrated into the fabric of their world a digital 7 by 24 experience that extends their presence across the globe and connects them to everything in real-time. For them this is not magic, not technology, not new, it is not even cool any more: it just is. It just is what it has always been for them.

These young entrepreneurs, scientists, engineers, farmers, doctors, artists, philosophers, teachers, athletes, politicians, designers, technologists, historians, geographers fundamentally see the world as an integrated whole free from borders and restrictions. They expect to be able to answer any question in seconds from the palm of their hands. They don’t need to know anything: they just need to Google. They expect things to work together, they expect technology to be free, they adopt technology easily, they are not loyal to any brand, they are socially responsible, they get the work/life balance and they play World of Warcraft every week with their friends.

And they are your new labour-force. They do not see you are their employer: they see you as their collaborator. They are working for you to find an outlet for their creativity, a place where they can problem solve, somewhere they can express themselves and be innovative. They do not accept anything as a fundamental rule, all rules are meant to be tested and then bent, twisted and even broken if it means doing something better. They fail frequently and they enjoy failing for the lessons it teaches. They learn fast and adopt the latest ideas and technologies even though they know they are not always ready and reliable. Speed is essential to them, documentation is not. Delivering something that works for most people quick is better than delivering a perfect solution months from now. They’d rather be late delivering something cool rather than something business-like and on time. They do not settle for good enough: they want to delight. They love change. They revel in challenges.

So how do you exploit them? You embrace them. You create a culture that allows people to do lots of “R” in search of the “D” in R&D. You encourage them to experiment and if they fail you congratulate them on eliminating one more bad idea and encourage them to learn from the experience and try again. You make it clear that it is OK to challenge long held beliefs and you make it clear that you reserve the right to make the final decisions. You learn to say “OK let’s try that” and never say “That won’t work because …”.

As we move into the next decade, which I’ve dubbed to the “teenies”, the millennial labour-force is ready to change everything in your business. Are you ready allow them to take you to the next level and start Empowering Change in them?

July 23, 2010 at 8:32 pm | Business and Technology | 1 comment

Observe, Orient, Decide, Act

Colonel John Boyd, USAF, left us with two interesting legacies. He was the most successful combat pilot in history and yet never shot anyone down. And he developed the OODA Loop theory for air-to-air combat which fundamentally describes how modern businesses must survive.

Known as “40 second Boyd” because he could shoot down any opponent in under 40 seconds when starting from a tactically disadvantaged position. He learned his skills by watching hundreds of hours of film from the gun-cameras mounted in Korean war era MiGs and F-86 Sabres. He created the OODA loop as a tactical approach to winning air battles based on the idea that the pilot that reacted fastest, indeed the pilot that continued to react the fastest, would always win.

The OODA loop, observe, orient, decide, and act, says that combat, and sport, and business requires that we are constantly trying to take advantage of the ever changing situation before the opponent does.

• Observe: use your senses and systems to collect data
• Orient: analyze the data and form an opinion
• Decide: what to do based on your opinion
• Act: and implement your plan

And then do it all again, and again. As you act you immediately change the situation so now you must observe, orient, decide and act on the new circumstances. What this means is that while your competitor is reacting to your changed tactics you are already planning and executing your next one, and the one after that. Maintaining this continual OODA cadence is very difficult but it is the key difference between companies that compete successfully and win markets and those that merely compete.

Following an OODA approach to competing demands that you have the senses and the systems to collect the data you need to make the right business decisions. You started your business because your gut told you that this would be a profitable, fun and worthwhile enterprise. Do not ignore your gut: it got you where you are and you need to keep checking in with it. However the speed of business demands that we have empirical data to support our instincts. Just as we know we are driving at 30 mph because our senses tell us we still check the speedometer when we see a police car to be sure. In the same way when we run our business we instinctively know what we need to do but when a competitive threat looms we need data to tell us what the effect the threat is having and what effect our response is making.

When we look at the computer systems we invest in for our business we, invariably, focus on systems to run the business. I want to encourage you to think about this: how many speeding tickets would you get if you didn’t have a speedometer and relied soley on your instinct for speed? Have you ever speeded up to 30 mph when you pass a police car? I didn’t think so.

A business priority must be to put in place mechanisms to report on Key Performance Indicators (KPI’s) that give you immediate feedback on how your business is faring. And we are not talking about feedback once a year from the auditor or once a month from the bookkeeper but feedback at least once a day that shows you exactly where you stand. For example you might have a DSO (Days Sales Outstanding – the average number of days before you are paid) of 30. If you could see that on a daily basis you could tell if it is drifting to 35, 45, 60 and do something about it rather than find yourself in a cash-flow crunch. And while you are stepping up your collection process, getting the money you need to advertise and invest, your competitors are still oblivious to the fact that their customers are becoming tardy payers.

So as you think about what you need for your business consider that real-time insight to how the business is performing may be just as important as a new fork-lift or a new lathe or new premises. And may be more so. Data is the essential ingredient to Empowering Change.

July 16, 2010 at 10:49 am | Business and Technology | No comment

Working in the margin

For more than six decades now we have been using technology, specifically computer-based technology, to drive costs out of the business. Quaint hardly describes those now sepia pictures of serried hoards of clerks, stamping, signing and sorting multi-part documents in vast open-plan offices. Typewriters on every desk but phones only on the manager’s. And over the last 60 years we have slowly replaced those jobs with technology solutions and those people have moved their skills into different fields. Maybe you are one of them.

Today there is not much automation that is left to be done. Indeed most people in the computer business spend their time trying to replace the systems they put in 10 or 20 years ago  and we are even replacing systems we put in only one or two years ago. And we are doing this now because we are desperately trying to drive cost out of IT.

With the way the economy has been for the past 10 years everyone is completely focused on cost containment.

But that is not the only way to keep increasing the margins in your business. Mr. Micawber once reflected; “Annual income £20, annual expenditure £19 19s 6d, result happiness. Annual income £20, annual expenditure £20 0s 6d, result misery.” Profit is the difference between income and expenditure. We have already driven out all the significant and unnecessary expenditure we can: the pips are squeaking, there is no more juice in the lemon!

Businesses that can turn technology to their commercial advantage will be the Glaxo’s, the BP’s, the British Airways, the Sainsbury’s of the future. It used to be, in 1935, that if you made it to the Fortune list of top companies you’d be on that list for 90 years. Today companies on the list last only 15 years there on average.

Look at FaceBook, Microsoft bought by a 1.5% stake for $250mn, or Amazon, worth over $50bn, these are companies that could not exist without technology to create markets,  create products and deliver revenues.

So what does this mean for your business? Look to turn technology into a way of creating new revenue.

Maybe you can deliver your product and services to your customers through technology that gets it there faster, cheaper, safer. Do kids want to go shopping in the High Street? No, they want to surf the web, from their iPhone and get a package on their doorstep the next day. And kids have a lot of money these days.

Can technology help you understand your customers better? Help you with detecting trends, buying behavior? Can technology help you discover why customers don’t buy from you? Or why they start to buy and then stop.

Is the customer experience with your company better because of technology or worse? What can you do to make your customers become your best sales team because your technology makes them love doing business with you? What can you do to make your competitors look un-cool, out of date, not in tune with the customer?

If you have an idea for changing your business model does your technology allow you make those changes? Or does it hold back and force you to do things the old way? Can you model what effect your ideas might have if you implement them? Or do you have jump and hope?

How do you know that you are being successful? Does your technology tell you, give you feedback on how you are running your business? Does your technology monitor your competitors?

There are as many ways of turning technology into a competitive advantage as there are business people with ideas.

In this series of postings I want to explore ideas on how we start to use technology to drive sales, how we enable business owners to run their businesses proactively and how we Empower Change that increases the margins in your business.

Tell me how you turn technology into a competitive advantage.

July 9, 2010 at 11:47 pm | Business and Technology | 5 comments