re-inventing the wheel

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Here’s a secret,  most of what we do in the technology space has already been done.  Unless you work for the  VERY small number of companies who are actually breaking new ground, its already been figured out. If you aren’t sure if you work in one of those companies doing those things…here’s a hint, if you you have to ask, you already know the answer….

Knowing this, does it flip your world???   Instead of turning away and trying to figure out how to do the next great something, why not start here…

who has done this before and what can we copy

By copy I mean just that…Don’t take the concept and tweak it. Don’t waste any time on it, think your email server is different from everyone else? What about CRM? ERP? … what if their are no special cases for most things?  What if you could just copy …

there is nothing so quite useless, as doing with great efficiency something that should not have been done at all. Peter Drucker

What would that mean??? Project agility goes up, certainty goes up, costs go down, the business benefits (and its ALL about the business right?)…

And here’s the thing, if , in your search for what HAS been done before, you discover something that hasn’t… you might have actually uncovered something, a true differentiator

The only thing standing in the way of this is us….

 

Assumptions

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We run our world on them, but do we owe it to ourselves during these seriously troubling times to seriously challenge them?  I would suggest we need to totally rethink our paradigms, given that some pretty fundamental globally impacting decisions are being made based upon them.

Austerity as a way out of recession has driven global policy, particularly in Europe. The assumption was that the empirical evidence used in it was correct. Ops.  Now you have a situation in which over 50% of young people are unemployed, economies like Greece are retracting faster than ever predicted and a huge amount of social unrest.  Incidentally, while we are talking assumptions, here’s one – that these economies will solve these issues through political and economic means…. i predict not, The last time we had huge social inequality and a ruling class that ignored the masses, revolution occurred.  What is clear to me is that economists don’t actually know what is going on.  Their models are predicated on some structural stability that might be mythical … so its all wrong? Could be..

Next assumption – that banks are safe and trust worthy. Clearly not, these institutions have gotten away with some of the biggest scams of all time, some overtly criminal

These traffickers didn’t have to try very hard. They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows in HSBC Mexico’s branches

Others, a massive con, convincing customers that they are acting in their good only to add no value at all…

The entire financial management industry is a rentier arrangement: they skim immense profits and return no productive yield at all.

Would you, as a member of the public be ok if a member of known organised crime ring went into a powerful public position, like the ministry of justice and got some monetary benefit by making that move?  Seems absurd, yet that’s what is happening in the finance industry. Assuming that those in the public sector are working for our good seems naively absurd in today’s world.

What about the assumption that you should go to university, get qualified and you’ll do well in life? Another myth busted by the GFC, leading some to overtly state its not worth it.

Innovation is

So before you embark on your next initiative, challenge everything.

  • Who is proposing it, the people with the most to loose, or those with true intent, it is a rare turkey that votes for Christmas
  • What belief drove the decision you are being asked to make,
  • Is the data accurate ( like Reinhart, Rogoff)

So as a starting point to some new paradigms…economists don’t really know whats going on, banks aren’t trustworthy, CIO’s and IT shops are knowingly hampering your business, education isn’t always the answer, innovation – everyone is talking about it and virtually no one is doing it.

is disruption inevitable?

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Reading the mainstream press you would think so… “hey we’re going out of business because we got disrupted”….Kodak, Dell, Borders…. all poster child examples of it…

But is it inevitable?

I think the first thing to get clear on is what is disruption. I summarised it (a long time ago using Clayton Christensen’s model), But it is light on an incumbents inertia to change (hey, i’ve learnt a bit since then). It appears that product disruption is slightly more granular…
There ARE unpredictable technology advances ….but in writing this, I was struck by how hard they are to identify… to me there aren’t really that many. I’m thinking truly revolutionary stuff – the printing press, electricity, 3D printing, the wheel, lasers.  I think they are truly disruptive because they caused a large discontinuity in the natural evolution of the product.. For instance, could companies who make eye glasses have reliably picked lasers would compete with them (LASIC), do builders/OEM think 3D printers are a threat to them?  For printing its an evolution, for them… thats different.

swardley ‏

Being disrupted by unpredictable market change is part of business BUT ….. being disrupted by a predictable market change is a sign of woeful strategic failure

But then there is a bunch of things that are labeled disruptive (including by me), but really are predictable. Digital printing (kodak invented it), streaming content, cloud computing, IP telephony…. all predictable evolutions. Failure in these instances is a management failure…but its more convenient and easy for management to blame disruption or an outside force, than it is to accept responsibility.

Inertia…it definitely exists, i’ve pushed against it for years. But again its a scapegoat kind of word. All change is hard, changing the what a company does, how and why .. the fundamentals is even harder. But given the stark choice of obsolescence, or taking on hard stuff.. what are you gonna do?

How to deal with predictable disruption is also pretty well documented, (he’s my quick summary). However it is not convenient, easy or without risk… CEO’s prefer not to battle politics rather than fund a step out, they’d rather milk the cash cow than canabalise their existing revenues. (interestingly, hard ass CEO’s of great companies do this)

Embracing Commoditisation

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Today saw the double announcement that Salesforce and Rackspace (and hints that Amazon) are entering the mobile app development space. In fact actively commoditising it.

Outside of the hyperbole about how mobile is the platform de jour, what struck me about this is it was entirely predictable.  I’ve fast become a big fan of the work of Simon Wardely. if you read his latest series of posts, you will see what I mean about predictability.

Firstly, everything evolves, and the commoditisation of mobile app development is no different.  Today’s announcement probably saw a rapid movement up the curve for some companies, the ones still in the custom build phase, however the SDK’s are now a product bordering on a commodity.

Simon Wardley's evolution model

Simon Wardley’s evolution model

The second reason this was predictable was using Simon’s ILC model. My view on this is that in the greater game of strategy, it is always in someones interests to be doing the commoditising, as opposed to being commoditised.  And in the new world of cloud computing, the big guys in this space have figured out models that actively target sectors to target. (see Simon’s post on Amazon)

Simon Wardley's Innovate, leverage Commoditise model (ILC)

Simon Wardley’s Innovate, leverage Commoditise model (ILC)

The thing is, in actively commoditising other industries, these cloud players drive scale onto their platforms, create ecosystems of developers wedded to their platforms, drive more integration into their core offering (SFDC) and can see the new breed of winning plays in which to acquire.  Then rinse & repeat.

Now, I know what it is to live in a company that is being disrupted, you worry about today’s numbers and how you marginally improve your portfolio day in and day out… and I know that it is easy to look back in hindsight and say “that was predictable”.  The trick for us all, and i think the true message in Simon’s serious of recent posts,  is that we owe it to our companies or ourselves to undertake the process of predicting what will happen to our company and jobs and take the appropriate steps to react.

It’s that lack of understanding [of] Why which will almost certainly be behind the highly probable and unnecessary disruption of once great companies such as HP, Dell, IBM, Oracle and SAP by a predictable market change such as cloud computing. These companies by right of their position should never face disruption by a predictable market change. They should only be disrupted by an unpredictable market change

In fact Simon is pretty scathing on companies who fail to react to what is predictable (more on this in another post)

The content conundrum and NZ fibre

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I read the latest in a series of articles indentifying a lack of digital content as one of the main barriers to take up of fibre (UFB here in NZ). In NZ by far our most important digital content is sport, and Rugby is the king of the heap here …

For my international readers a brief history.   There is a government funded rollout of fibre to 85% of the households here.  Take up of the fibre services is low (circa 2.8% of premises past). There has been enormous structural change in the industry given the forced separation of the dominant Telco into a network (chorus) and retail arm.  This has forced duplication and system work onto the industry that they are still trying to deal with… mundane under the hood things like how to buy, provision and manage the fibre solutions at a retail level.  To top it off the dominant pay TV station is Sky, who owns a monopoly on movie and more importantly sports content…

And that is the rub … because, dear  New Zealanders, if you want to continue to have the best rugby team in the world (the All Blacks), then you need to pay enough to hold the talent here…. and sky TV are the lynch pin in that….  no big TV rights, no quality players, and no quality players… no world champions…. and no world champions means a unhappy nation…(on the whole).

The government is trapped… politics is about popularity… and it won’t do anything to ruin the national sport… so until someone ponies up enough to fund the retention of the players and deliver the content over the glass instead of Satellite… high value sports content is going to remain locked up …. sure you will see the normal bombast from the governement… but my prediction is very little action..

Sure i can solve the movie challenge with a small amount of effort, but I can’t get the sports…

Addressing the disease of short term thinking

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I’ve read at least 3 blogs recently castigating the (now) dominant business practice of discounting the long term future in favor our short term gains.

I couldn’t agree more, our world is littered with examples of it

The 2008 financial meltdown stemmed directly from rampant short-termism, as bankers did deals and packaged up bundles of securitized mortgages that many of them knew full well weren’t very sound in the long term

There is greed, some of it institutional…. feathering the nests of the employees instead of creating long term value that sustains both the institution and the economy

Chuck Prince, CEO of Citibank, in a now infamous quote said, “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,”

Haircuts could not go much lower. Now simple greed took over. The banks turned to outright purchases of securities, morphing their role as lenders into investors.

There is systemic – shorttermism the share market – hello in what world would quarterly earnings drive a culture of long term value…And in what world would investors seriously expect a share to continue to rise… its irrational,illogical and unrealistic. Yet many expect it. There are a few like Amazon who seem to have educated their investors that occasionally they will miss the numbers when they choose to invest in the future of that company, but there are very few examples like this now.  What investors need to realise is the consequences of this incessant demand. The Companies they invest in continue to bow to the weight of the market expectations, Instead of continuing to focusing the companies resources on dealing with the impending market change, they choose do prop up the share price for another year…

Many will suffer the same fate as previous companies who have failed to prepare for the expected from Blockbuster to Kodak. But before the normal round of excuses begin, the inevitable rush to safety of executives behind the “innovator’s dilemma” and claims of unexpected changes, let me blunt.
Those companies failed because their executives failed..
Telco’s, i’m looking at you … how many are hanging onto high margin voice revenue’s and giving lip service to the impending move to IP and content.. for gods sake many of them actively FOUGHT the move to mobile… “its lower margin”

There is a lack of morals – people knew the derivatives they were creating were toxic, there are companies out there trading off the welfare of communities against the higher profits and choosing profits … no one blew the whistle. As lambasted as Apple was over the foxconn incidents, at least they had a system and code in place… do you seriously think that all the other corporations aren’t worse? Really? There are countless examples of this happening… its never stated, but it is definitely a ‘soft’ benefit of offshoring / outsourcing.

What happens when the short term profiteering creates a planet you can’t inhabit? Take a close look at the smog in Beijing… it doesn’t appear that far away does it?. But thats ok right, because that’s Beijing? Really? You don’t get that we share the same planet?? Heard of or felt climate change?

We can’t accept that our communities can be flooded every couple of years,…We can’t accept that’s how life has to be lived.

So how long will you fall into line? Think that profiteering is preferred over building long term business practices that support your companies long term viability at the very least don’t destroy our world, and perhaps even better it. Think about what you are about to do today, Monday.  Is it about hitting this years targets, or is it a longer term initiative that means the company and community will be thriving in 5 years time.

What is your strategy…

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you know,  the real one. The one that your company is actually implementing …. I guarantee you its different from the one you wrote.

Most companies have a strategy, its either a:

deliberate strategy – the annual plan using facts and analytics and assuming that we can foresee and somehow control what the next 12-60 months will be like, or

an emergent strategy – a rapidly evolving strategy based on quick feedback  from the real world and agility within the organisation

Everyone has a plan until they get punched in the nose – Mike Tyson

Both are valid forms of market response.  However I think theres a third category… your real strategy.

Strategy is determined by what comes out of the resource allocation process, not by intentions and processes that go into it

Clayton Christensen

Think about that statement. Where you actually focus your people, spend your money or development time is what your real strategy is.  And in many instances…there is a missmatch between the intended strategy and what actually happens

Some examples

Stated ” we want to be #1 in a growth market”   ———- > vs  giving people KRA’s with the first item being “protect the legacy revenue” – What you are actually saying if in doubt sell the old stuff before the new stuff

Stated ” lead in customer service”        ————-> vs ” lower costs in operations and build core products” – What you are actually saying don’t automate, don’t invest in customer service tools and squeeze more service down the existing channels… nice

Stated ” your local bank”    ————> vs “consolidate branches and drive people online” – What you are actually saying yeah local to a 50km radius, you really care

Stated ” We’re all in with the cloud”    ————> vs “release on premise products first and make it difficult to transfer licenses to the cloud model ” – What you are actually saying  whatever we say, we will force you to keep using our onprem products

Stated “Increase sales acquisition” ————> vs   “  maintain sales opex” – What you are actually saying  miracle up more business for same spend and whatever you do, do not bump commissions!!

See the absolute dichotomy of these things. You are setting yourself up to fail, confusing the troops and wasting the market opportunities

A wise man told me once, to win, you need to get all the wood behind the arrowhead.

If you aren’t getting the results you want, perhaps looking closely at what policies, drivers, KRA’s and investment decisions you actually have running thru your organisation will give you some insight into why.

Who trapped VMWare in the innovators dilemma …and how do they get out

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A great post on techcrunch by Ben Kepes highlighted just how trapped by their business model incumbents can become.

Who trapped VMWare? To me the answer is 3 fold.

  • Bad buyers

IT departments within large organization – are, generally speaking, paying little more than lip-service to the growing calls of a new generation of technology

Buyers, traditionally the IT department are rewarded to maintain the status quo, particularly with Cloud computing – a form of outsourcing.  This response is due to cludge of drivers….Reliability demands – any change pretty much leads to outages, having kit means having a job, arrogance – we know better than you, and fear or comfort with a current technology set, there is also some pretty nefarious stuff that goes on.  People with specific technology skills have made a lifelong career in being the only person who can make an app work…

The problem with lagard IT, is it reinforces to vendors not to change, and in some instances they will actively come out and sell against the new paradigm (Oracle anyone?). HT to Simon Wardley on the above adoption cycle

Unfortunately this leaves gaps in the market for new entrants…and this leads to disruption.

  • Bad management

Listening blindly to your customer, using dated strategy or financial models to new situations or simply telling your bosses what they want to hear, not what they need to hear all lead to reinforcing the incumbent business model.  Listening to the customer, particularly the ones above creates a false sense of security.  Eventually even the IT dept will adopt the new, with cloud its because they will eventually end up at a financial disadvantage, and then you are stuffed… and in the mean time, your mid-level managers have been vetting out any ‘radical’ new business idea, so by the time you need them, well its too late.  If you look at your bench-strength and its full of MBA’s…you are screwed. They are indoctrinated with the same playbook as everyone else (there is no differentiation when its the same)…. instead you should look for outliers, rogue elements because they are the ones who will create something truely new

Senior management is also guilty of not being true stewards of their companies.

“CEO’s are doing the best they can under the circumstances, but there are units in their organization that need to be protected, prices that need to be supported, sacred cows that can’t be touched …….Which is great, unless your competition doesn’t agree. …. When you are competing against someone who doesn’t have to worry about an existing business, they will almost always defeat you.” Seth Godin

Taking a short term view, protecting the old… taking the overt or covert approach of ‘walking back slowly’ you are ceding the future market and opening yourself to disruption…. true leaders stand up, make hard calls and do the right thing for the company long term….

Apple CEO, Tablets will canabalise PC‘s

SAP has said the same, Amazon has done it.    Get the point, great companies bite the bullet

  • The sharemarket

The incessant demands of the sharemarket to protect or grow existing revenues is idiotic.  The analysts community can’t deal with new business lines … “hard to value that new thing, not used to it”.  Shares slide on news that companies are investing in non-core business.  You guys need to take a look at yourself,  the GFC (which I hold shareholders at least partially culpable) proved the point that incessant demands for more drives bad behavior… and then if you don’t like what the CEO is doing, you agitate to reinforce the status quo… numpties.

  • How can they get out?
  1. Start planning for the future – look for the areas that are commoditising and build an ecosystem on top of it.  Get a lot of developers to innovate on top of that (cos you DO NOT have the skills to build the new thing) and watch for the winners. Cloudfoundry looks like a winner to me
  2. Stop listening to your customers…. start WATCHING your non-customers. They are likely already using precursor’s of the thing that will be your death nell
  3. Get an innovation program in place – agree to the incremental risk and potentially spend (not always), and distribute your effort across core, adjacent and transformational innovations
  4. Get different people with different skills working on this different initiatives. Your rogue elements are probably already leading the way, just give them direction and focus
  5. Capture ideas from the source, and get them unvetted.  This is normally the front line helpdesk.
  6. Allocate resources to innovation, stay the course – its a long game,  and don’t compromise. If it is annoying people you are on the right track
  7. Get to grips with canabalisation, internally and externally. The alternative is extinction.
  8. Be prepared to fail, don’t encourage it but do not penalize it either.  When you do, get another group of smart folks to look at the remnants, dollars to doughnuts there is something there, maybe they can make it work

 

 

I’m becoming a fan of standards

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I never thought I would, structure and constraints aren’t really my gig.  However after reading some of the great blogs by Simon Wardley, trying to deal with an industry that doesn’t have any currently and some personal experiences, I’m changing my stance.

At a personal level, i’ve just completed my second order through Charles Trywhitt for business shirts. Yep i buy my shirts online (you should too, they are bloody good shirts, bloody cheap) . I CAN do this because unlike woman’s clothes there are standards, much to my wife’s annoyance.  Same collar size, sleeve length and chest the world over. Aka a standard. I can buy the shirt trusting it will fit. (apparently due to the advent of vanity sizes -aka lying to the lady about her true size – this is no longer the case in woman’s clothes).

Another example, air travel. Pretty generic activity.  Lots of websites doing the same thing, funnily enough, not always in the interest of the customer. Check out this from expedia

 

And then I went direct to AirNZ’s website to validate the pricing

Whops…. $2k more to fly on the same flight, same airline…. something i caught because now the power is in my hands to check and find possible itineraries… because I can put in the destination airport code and time now instead of an agent…

At a work level, I’m trying to figure out how to get our company to buy fibre products off 4 different providers. All of which have different ways of ordering, providing, billing, managing and implementing their product… IT folks scoff at network heads, they shouldn’t. Its bloody complicated and for the most part they have solved a lot of the technical challenges you guys are grappling with in Cloud land.  They didn’t get the business model transformation part right, but neither are many of you.

At an innovation level, now I (at least partially) understand Simon’s model, I can see how standards drive componetisation which in terms commoditises activities… and in doing this you see a wave of innovation at high levels in the ecosystem (on top of the commodity).  And i’m beginning to see how this can work in my favour a lot more.  I was talking about an idea with a friend, and he off his own bat said “now cloud is here the physical cost of the new service is really small now…  barriers to start up have gone away”, and in doing so more and more folks are innovating on top of it. Very cool when you can benefit.

Next time you see a standard emerging, think through how you can best make use of it.

So, i’m having a crisis of identity

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Maybe not identity… but i’m 39 years old, i’ve spent the last ..4-5 years in steadfast battle against middle aged spread. I’ve been determined to fight it…

But lately, man its hard.  After 20 years of Martial arts i finally retired last year.  I’ve developed arthritis and have now chronic back injuries, but i loved it, teaching and training was gold for me…. i’ve backed off…started ‘managing’ myself… But i don’t like what i see in the mirror, in fact i dispair

I look at the feats of Ben Kepes, Dan Fowlie George Reese and Chris Quin who post their running times distances and think…. 21km?  Dude drive!!!

Ben Christian, another friend recently biked the tour De France and does a cycle training session 5 days a week!!  Who’s got time for that!!!

I’ve ‘decided’ not to  run because of the arthritis.. i try to get to the gym, however lately the demands of work have severely impacts my ability to get there…. wow-ah’s me…its all hard..

Its not how hard you can hit, its how hard you can be hit and keep going forward”  – A line from whatever was the last ever Rocky movie

My real world martial arts experience says this is true, winners really do this…you can see the moment in any fight when someones breaks, something inside gives up

Feels like i’m being hit hard at the moment…. giving up looks quite attractive, and thats not me at all…