Don't try to fail, just try

It's been worrying me a bit, with all my emphasis on learning from mistakes and removing the stigma from making mistakes, that I might be encouraging people to try to make mistakes.

Although making a deliberate mistake can be a very useful exercise and lead a company to discover insights it couldn't find out otherwise, it shouldn't be the focus of your approach.

The point is to try to succeed lots of different ways, make small bets, try "safe-fail" experiments. Follow those that appear to lead somewhere. Ditch the remainder quickly.

More and more people are thinking this way. My evidence? Today's Wall Street Journal Business Insight section, which talks about experimentation and learning from failure throughout. One example is "In Search of Growth Leaders," by Sean Carr, Jeanne Liedtka and others which asserts that managers who can foster growth have different mindsets than those who can't. [A nice graphic in the article compares people who see life as a journey of learning--i.e., potential growth leaders--to those who see it as a test--similar to the work of Carol Dweck referenced by Amy Edmondson in HBR, and discussed in a recent Mistake Bank post.]

There's also "Oops! Accidents lead to more innovations. So how do you create more accidents?" by Robert Austin, Lee Devin and Erin Sullivan--which says to "explore lots of approaches" and "make accidents cheaper" which is safe-fail by other words.

And "Follow the Leaders," by Craig Pearce, which encourages allowing team leadership to shift from member to member based on the needs of a particular part of a project, echoing ideas from the recent HBR article on management lessons from multiplayer online games.

If you do make a mistake, don't throw it away. Learn from it, and put it in the Mistake Bank. The public one, or one of your own.

Related posts:
Multiplayer games demonstrate a new model for leadership
Amy Edmondson in July/Aug HBR
To progress in complex environments, experiment
Make some mistakes, and profit from it

Tags:

Mistake Bank, experimentation, learning, errors, failure, mistakes, innovation, leadership, Wall Street Journal

Good news: The WSJ is back to being a great business paper (for now)

I wasn't alone in complaining about the Wall Street Journal's decline in the quality and quantity of its business news articles. Thankfully, as Slate's Jack Shafer points out, the Journal has improved markedly in this area recently.

I'd point to this article on Dell's embrace of web2.0, this one on new business gurus (but no women) and this on municipal broadband as recent standouts. Each of which has reconfirmed why I like the paper. I've also noticed that the wonderfully silly page-1 articles (I still remember the 30-year-old one on Meat Loaf) have returned.

Related post:
Wall Street Journal is discarding its identity as a business newspaper

Tags:
management, strategy, newspapers, media, Wall Street Journal

Dell's web2.0 efforts pay off

Dell has taken a beating in the marketplace (both the commercial marketplace and the reputation marketplace) over the past few years. When founder Michael Dell took the reins again, you had to wonder whether his presence back in the CEO chair would really mean something, or would Dell slip into permanent stall mode like so many PC makers of the past (remember Gateway?).

So it's notable that Dell has distinguished itself among consumer electronics companies for embracing the capabilities of web 2.0 to engage with customers and influencers. According to the excellent new book "Groundswell," by Charlene Li and Josh Bernoff, Dell used a PR crisis created by a blogger to jump-start its participation in social media, by 2006 was monitoring blog posts on the company, proactively seeking out problems and responding to posts, if necessary reaching out to users with technical support.

That effort has expanded to include sensing problems by monitoring Twitter (as well as using Twitter to communicate with end-users and others).

Today's Wall Street Journal points out that Dell has mastered the art of energizing the "groundswell" to build publicity for its products:

Dell Inc. hit a viral-PR home run last week when photos of a not-yet-released computer -- a candy-red miniature laptop -- swept across the Internet, creating excitement in advance of the release.

The buzz wasn't an accident: It was the payoff from a year-long effort by Dell to engage more directly with bloggers and others who write about the company online....

Engaging with blogs isn't just a defensive move. It has also changed the way the company promotes its products. Chief Executive Michael Dell brought the buzz-generating candy-red computer to The Wall Street Journal's D: All Things Digital conference with the goal of showing it off to some of the bloggers in attendance.

A writer from Gizmodo, a popular gadget blog, saw the new computer and snapped a few pictures, which he posted on the Internet. The company then posted some official pictures on its own blog, and the story took on a life of its own. Dell's blog post says Gizmodo "caught" Michael Dell with the new computer.

I own a Dell computer, a beige minitower from the old days. It's a nice, boring computer. Dell's efforts in web 2.0, however, are the opposite of boring.


Related posts:
Is your marketing department confused about web 2.0? ("Groundswell")
Twitter and "Every Minute Accounted For"
Companies stall because they don't listen to customers

Tags:
social media, information technology, web2.0, marketing, blogging, communication, Wall Street Journal

US third broadband option an elusive goal

Earthlink's withdrawal from the municipal WiFi business, leaving the future of networks in Philadelphia and other cities uncertain at best, and similar news from MetroFi, has closed a chapter in the search for alternatives to the phone company and the cable company for a third broadband competitor.

Third-tier cities and rural areas are most affected. When the cables and telcos are offering higher-speed services (like Verizon's FiOS), they are doing so in the major metro areas. So it's not surprising that cities themselves are getting, perhaps reluctantly, into the broadband business. The efforts of Chattanooga, Tennessee, to build out a municipal fiber network, are profiled in a recent article in the Wall Street Journal.

While covering US broadband problems profiled before in this blog, like lower coverage, high prices and relatively low speeds compared to other countries, the WSJ article usefully shows the impact on customers, especially business customers, of poor broadband availability and performance:

In a converted saddle factory here, Jonathan Bragdon, 38 years old, runs a 40-person company that he says couldn't exist without a lot of affordable Internet bandwidth. Seven of his employees live and work in other cities, including New York and Leeds, England. His business, called Tricycle Inc., transmits high-resolution 3-D simulations of carpeting to interior designers.

More important than download speed for such work is upload speed. Yet, on most connections it often takes longer to upload files to the Internet than it does to download them from the Internet. With Comcast, Mr. Bragdon was getting a download speed of eight megabits a second, but an upload speed of only one megabit a second.

About two years ago, Tricycle switched to the EPB's fiber network. Mr. Bragdon says that lowered his costs several-fold and gave him the flexibility to upgrade to speeds as fast as 100 megabits a second. "With the rivers and the mountains, young people want to live here," says Mr. Bragdon. "But you need good bandwidth to work here."

Let's hope businesspeople like Mr. Bragdon can get the bandwidth they need, from whatever provider. And if the cables or the telcos won't provide it everywhere it's needed, perhaps the municipalities will have to.

Related Posts:
US broadband prices vs. the rest of the world: nothing has changed
US consumers need a third broadband option

Tags:
broadband, technology, pricing, Wall Street Journal

No female business gurus? Try this list

There was a fun article today in the Wall Street Journal that ranked the top business gurus by citation, Google hits and media mentions. Familiar names, like Gary Hamel, Malcolm Gladwell and Thomas Friedman are in the top 5.

This paragraph, though, struck me:

One notable absence from the top 20: women. The 2003 list included one woman, Harvard's Rosabeth Moss Kanter, among its top 20, but she fell in the new ranking. "I would love to hear more female speakers," says Kristi Wetherington, CEO of Capital Institutional Services Inc., a Dallas independent institutional brokerage firm.

So who would be on my list of top female gurus? How about these:

1. Herminia Ibarra, INSEAD. Powerful thinking on career management and networking.

2. Deborah Ancona, MIT. Authority on teamwork (her book "X-Teams" was one of my favorite books of 2007).

3. Amy Edmondson, Harvard Business School. Organizational behavior, including the value of candor and dissent in the workplace.

4. Rita Gunther McGrath, Columbia University. Practical yet profound ideas on leadership and innovation.

5. Traci Fenton, WorldBlu. A tireless advocate and thinker on workplace democracy.

And of course Ms. Kanter.

Related posts:

"Personal Networks: useful anywhere" (Ibarra)

"Blame it on the I-Team" (Ancona)

"Great innovation requires great teams..." (Edmondson)

"A more realistic way to profit from innovation" (McGrath)

"WorldBlu 2008 List of Democratic Workplaces released" (Fenton)

Kanter's Innovation Pyramid"

Tags:
gurus, thinkers, Wall Street Journal

Move to Intel chips helped Mac hit the jackpot

When the Mac's move to Intel chips was announced almost three years ago, it seemed like a good, practical move. The PowerPC chip was falling behind Intel, performance-wise, and Apple wanted to leverage Intel's much larger investment in performance and capability. Intel, for its part, wanted the sexiness of being associated with a cooler brand than Dell, Lenovo, etc.

But the full impact of the processor swap is only now becoming apparent. Yesterday Apple stated that its latest quarterly earnings rose 36% over the same period last year, powered by a 51% increase in Mac sales. The Wall Street Journal buried this telling passage into its article on Apple's earnings release:

Apple's computers now also easily run Microsoft Corp.'s Windows operating system, which has helped Apple in a long-running campaign to persuade Windows users to switch to Macs.

Precisely. The Intel processor was a Trojan Horse hiding Windows compatibility--the real value of the switch from PowerPC. Eons ago, people in companies used Macs all the time (it was on my desktop in 1989). Then Windows 3.1 swept through the business world, and Macs retreated to schools, graphic designers and filmmakers.

Now, people who require some Windows programs (because of work or other reasons) can retain that compatibility and get the benefits of OS X and all the interesting applications that run on it.

One of those people is me. The Mac returned to my desktop in August 2007 after a 12-year hiatus. It's good to be back.

technology, personal computers, Apple, strategy, Wall Street Journal

Wall Street Journal is discarding its identity as the business newspaper

I've frequently talked in this blog about things I first read in the Wall Street Journal. [I've subscribed to the Journal since I got a discounted subscription in grad school, twenty years ago or so.] But over the past several months, there has been a noticeable falloff in articles I find useful. It occurred to me last week that I very rarely see anything in the first section of the paper that is interesting to me as a general business reader. There's lots of politics, a fair amount of finance, international affairs... and that's it.

And then, earlier this week, I noticed that they've taken another page out of section one to devote to opinion. This may make some subscribers happy, but to me it's another page to turn past.

The Marketplace section feels unchanged, but that's small comfort. Now there are maybe eight to ten interesting pages in a typical issue of the Journal. And that's not enough.

Finally, the reasons for this are clear. New owner Rupert Murdoch is imprinting his stamp on the paper. Yesterday's news that the managing editor, Marcus Brauchli, was stepping down, was credited to Murdoch wanting his own people making the editing decisions. "Now that the ownership transition has taken place, I have come to believe the new owners should have a managing editor of their choosing," wrote Brauchli to the newspaper staff. [Which begs the question, whatever happened to the "hands-off" agreement that the Bancrofts supposedly negotiated?]

Murdoch apparently wants to build a general-interest newspaper to compete with the New York Times (with political views he likes better). He may reach that goal, but at the cost of losing what was distinctive about the Journal--a high-quality, daily look at business.

In which case, he'll lose at least one long-term subscriber.

management, Wall Street Journal

Innovative Irish company gets the red out

Traditionally, photography has been an edit-after-the-fact art form. In the film era, this meant taking lots and lots of pictures and discarding the ones that didn't come out right. Early digital photography has used editing programs like Photoshop to eliminate red-eye or improve lighting after photos have been downloaded to a PC.

An innovative Irish company, FotoNation, has developed technology that allows photo improvement to occur before the picture is actually taken. As profiled in today's Wall Street Journal, the company has developed a compact software program that eliminates red-eye in flash photographs before images are written to disk, among other innovations. Nikon and Kodak are building FotoNation's technology into their digital cameras.

Another interesting point about FotoNation: despite being founded in Galway, Ireland, the founder is Israeli and the chief engineer is Romanian--another example of the growing heterogenizing of Ireland's technology sector.

technology, innovation, software, photography, Wall Street Journal

Better e-commerce another way: invite related sites

Building on yesterday's post on e-commerce and making sites more effective, today's Wall Street Journal profiles Etsy.com, a selling site for handmade goods, and its embrace of independent related sites that connect users and allow them to share information (link to article - $$).

The article, by Raymund Flandez, puts a particular focus on We Love Etsy, a small social network of Etsy sellers. Through We Love Etsy, sellers share insights on how to use Etsy.com more effectively, highlight products they like, etc. The community helps otherwise lone sellers connect--a bit like an online Chamber of Commerce.

There's additional stickiness as well: if someone is a member of Etsy.com and We Love Etsy, she has that much more invested in the Etsy platform, and she'll be less likely to defect if another e-commerce site comes calling.

Etsy.com, for its part, approves of these independent sites (though they have begun to ask sites to request permission to use logos and trademarks). Rob Kalin, Etsy's founder, is quoted saying this:

"What it means for us is that we don't have to spend anywhere as much money on marketing because there are all of these avenues for people to spread the word and talk about what we do."

If there's a downside to these user-created sites, it's that their independence makes it difficult for Etsy to control their message. But by supporting a free exchange of information, Etsy retains a channel to the candid feelings of their sellers, and underscores its own authenticity.

Anyway, haven't we come to realize that controlling messages is at best twentieth-century marketing practice?

websites, ecommerce, marketing, Wall Street Journal

Taste trumps distribution (finally) in the beer market

Distribution prowess has ruled the US beer market at least since the '70's. (I recall a Harvard case talking about the downfall of Schlitz, focusing on Anheuser-Busch's building a nationwide distribution network.) As a result, most consumers have had to scan shelf after shelf of Bud Light and Michelob Ultra to find a good-tasting, fuller beer.

How things have changed. The craft beer movement, starting with Sierra Nevada in the '70s and blossoming with Samuel Adams in the '80s, is now a full-fledged market trend. People are buying Sea Dog, Cape Cod Beer, Yuengling, Brooklyn Lager, and hundreds of other small brands. Anheuser's market share is down, despite deals to distribute Stella Artois and Beck's.

And now, finally, the distribution monopoly that helped Anheuser crowd out rivals in the past is crumbling. In today's Wall Street Journal, David Kesmodel reports that distributors who had signed exclusivity agreements with A-B in exchange for promotional and cash incentives are beginning to turn away from those agreements ("Beer Distributors Want More Than One Best Bud" link - $$). Writes Kesmodel:

In recent years, some of Anheuser's 560 independent distributors became frustrated as craft brands such as New Belgium Brewing Co.'s Fat Tire Amber Ale surged in popularity and competing distributors snatched them up. Often, the distributors adding such high-margin brews were the same ones that peddled the beers of Anheuser's top rivals, SABMiller PLC's Miller Brewing and Molson Coors Brewing Co.

Anheuser wholesalers "are realizing that we have made the competition stronger by basically forfeiting these brands to them," says Chris Monroe, vice president of D. Canale Beverages Inc., a Memphis, Tenn., distributor that carried only Anheuser products until last fall.

It's a total reversal of where we've been. For years, large beer companies have relied on investment in non-product-related marketing, such as advertising and distribution, for sales growth--traditional "push" marketing techniques. Now, customer demands for better tasting, more-distinctive product are forcing distributors to carry what customers want.

Sounds like progress to me.

(Photo courtesy of Cape Cod Beer)

beer, distribution, marketing, advertising, Wall Street Journal

How to fix your selling process in 192 pages (not)

A column in today's Wall Street Journal boils it down for us: "...[C]ompanies need to 'reinvent' the way they sell, to focus on their customers rather than product features."

Stop me if you think you've heard this one before.

It turns out that consultant Ram Charan (best known as the co-writer of "Execution" with Larry Bossidy) has sales in his sights. He has a new book, of course, entitled "What the Customer Wants You to Know," and is interviewed in today's "Theory and Practice" column. Here's a taste of Charan's wisdom:

The sales function has traditionally been about execution. Most sales people are very good at connecting with the purchasing customer. They get training to know the product. And they beat the competition on price.

Now the world has changed. Copying a product became very quick. You now have competition on the Internet to beat down prices.

It has become very hard to differentiate yourself in the eyes of the customer, for business-to-business sales. So salespeople should not sell the product any more. They should find out what the customer needs, which will be a combination of products and services and thought leadership.

Nothing in the above excerpt is incorrect. So why am I so annoyed?

Because these concepts are more than a decade old. There's not a single statement in the interview that wasn't well expressed in the '90's by people like Michael Bosworth, and Jim Holden, and Jeff Thull, and others. Hundreds of companies have implemented programs to instill these lessons into their organizations. But apparently we needed Charan to compile these ideas into a new book, and assert they are "reinventions," before businesses would take them seriously.

Hopefully the book is well-sourced, and credit given to the folks who first developed these ideas. But Charan's salesmanship gives reason for concern: the book's website states, "This book defines a new approach to selling—which Charan calls value creation selling—that while radical is nonetheless practical."

Funny, I first learned that new approach to selling in 1995.

All the above obscures one undeniable fact: despite these methods being well-understood and well-taught, most business selling hasn't improved significantly. So there's something much, much deeper impeding improvement in sales.

I just don't think we'll find it in "What the Customer Wants You to Know."

* * *

(If you're interested in sales improvement, I'd recommend connecting with ES Research, a company with a much richer heritage in sales and sales leadership. ESR assesses many different sales improvement programs and provides information to companies looking to adopt new methods.)

sales, sales process, sales improvement, Wall Street Journal

Find out what the "followers" think using story-gathering

I shied away from the upcoming book called "Followership" by Barbara Kellerman because I recoiled from the title, I think. I picture numbed souls trooping behind some charismatic leader, pointing the way to a promised land of market leadership. Which never arrives.

I've felt like those followers from time to time. And one of those leaders, as well.

But as described in today's Wall Street Journal, in an article by George Anders, I'm more intrigued by the book. I agree, for one thing, that big companies grow static because the rank-and-file (a better term than followers? I don't know) have lost heart. They come for the paycheck, try to stay under the radar so when job cuts happen, they get overlooked. Etc.

So, from that perspective, energizing the rank-and-file has a lot of potential to improve companies. It can't replace true leadership (see previous post), but combining a good strategy, competent leadership and an engaged and motivated workforce can create a world-beating company.

But how to engage the workforce? The Journal article summarizes one big problem:

"Look at why big companies die," says Shari Ballard, Best Buy's executive vice president, retail channel. "They implode on themselves. They create all these systems and processes -- and then end up with a very small percentage of people who are supposed to solve complex problems, while the other 98% of people just execute.

Bingo. In trying to get more production from their staffs, companies simply deploy another system. Systems aren't going to get it done. Even conducting and acting on surveys (a favorite tool discussed in the article) are hopelessly reductive. HP is on the right track, holding one-on-one interviews with employees to get their candid feedback.

How about using storytelling? Gathering groups of people into anecdote circles, collecting their stories, looking at all of them and drawing out the major themes--that will allow the deep understanding and wisdom of the rank-and-file to emerge.

Then you can do something to improve the employees' ability to make a difference. And when they realize they've actually been listened to--well, that's motivating.

narrative, management, leadership, followership, storytelling, organizational development, Wall Street Journal

A resurgent Kiwi helps redefine the shoe-care product category

I love stories of companies resuscitating old brands by creating innovative new products. It shows that "maturity" doesn't have to be the end of growth.

Today in the Wall Street Journal, a front page article by Julie Jargon discusses Kiwi, the ancient shoe-polish brand available in every drugstore (link - $$). When a new CEO, Brenda Barnes, was appointed to head Sara Lee, Kiwi's owner, in 2005, she looked to reinvigorate the company's growth.

The prescription was simple: Kiwi studied the market by asking customers what they needed from shoe products. (The most recent podcast, with Tony Ulwick, discussed how to get customers to tell you what they want.) Then they created products that matched what customers really wanted.

They learned: more focus on the inside of the shoe, its freshness, and less focus on polishing the outside. Presto! A line of new products, fresh packaging and merchandising, and an old brand beginning to grow again.

It's enough to make you want to check your closet for old shoes that need polishing up.

(Photo: Kiwi Fresh Force, "The only shoe freshener with a revolutionary upside-down application," courtesy of Kiwi)

innovation, marketing, product management

Boeing learns hard lessons about partner management

(UPDATE: 11 Dec 07 - Boeing confirms it's on schedule for first 787 flight in 1Q2008)

I wrote a couple of weeks ago that the trend toward collaborative product development would create a premium for partner-management skills rather than pure technical skills for innovators. Nowhere is this in bolder relief than in the Boeing 787 project, some of the travails of which are profiled in a front-page Wall Street Journal article today (link - $$).

What surprised me the most were the issues resulting from inadequate supplier management; specifically this:

"In addition to oversight, you need insight into what's actually going on in those factories," says Scott Carson, the president of Boeing's Commercial Airplanes unit. "Had we had adequate insight, we could have helped our suppliers understand the challenges."

And this:

But many [Boeing partners], instead of using their own engineers to do the design work, farmed out this key task to even-smaller companies. Some of those ended up overloading themselves with work from multiple 787 suppliers, Boeing says.

The company says it never intended for its suppliers to outsource key tasks such as engineering, but that the situation seemed manageable at the time. "We tended to say, 'They know how to run their businesses,'" says a Boeing executive familiar with the company's thinking.

As Boeing knows now, selecting a strategic partner and entrusting it with designing, building and delivering a critical subsystem is far different from sourcing a standard part from a supplier. The prime contractor has the right and obligation to critique, probe and view its partner's activities from the inside (you need Doubting Thomases).

In the short term, these delays hurt Boeing. There is PR impact. And financial hits, in the form of penalty payments and cash-flow delays. But it is important to remember that the 787 product will have a 30-year life cycle. By that count, a 6-month or even 1-year delay in deliveries will have a negligible long-term effect.

It's also good that Boeing is not trying to mask its mistakes and instead to discuss and learn from them. Not everyone agrees: the Journal article states, "Lessons that Boeing is learning the hard way could end up helping rival Airbus." This will be true to some extent--but the highly complex lessons Boeing is learning will be hard to glean from the outside. If Airbus gets too confident in its follower role, it will overlook its own inevitable mistakes and let Boeing get out even farther ahead.

(Photo: the 787 Dreamliner. Courtesy of Boeing)

alliances, partnerships, innovation, aviation, mistakes, project management, product development, Wall Street Journal

Is there a health-care crisis in the US? The averages may say no... but the stories say yes

I've been drawn to write about the health-care situation in the US for some time. There have been very powerful proposals, such as this one by Michael Porter and Elizabeth Teisberg a few years ago, that I thought deserved advocating (link - $$).

In addition, for the past year I have bought my own health insurance (instead of having it provided by an employer) and with my wife managed the resulting insurer/caregiver/patient relationships. And, let me tell you, doing it yourself opens up a whole new window onto the health-care world. Buying your own insurance and managing your own care allows you to see deep into the sausage factory that is today's US health-care ecosystem.

Nonetheless, I held back. Perhaps our situation and experience were unique. Perhaps struggles and issues we had were due to our own mistakes. (We made some, perhaps many.) I also resisted the overheated rhetoric and drastic solutions proposed by some politicians. In addition, economists like Greg Mankiw provided analysis showing public concern about the issue is overblown.

The I read the front-page story in yesterday's Wall Street Journal by John Carreyrou (link - $$). It was horrifying to read about the gentleman who, despite better-than-average health-care coverage, ended up owing more than $1 million to hospitals, doctors, etc. And while the dollar figure was astonishing, more intriguing to me were the problems and issues he and his wife ran into while trying to understand and manage the bills. These problems and issues were very similar (though larger, of course) than issues my wife and I have run into in trying to manage health-care for our healthy family.

Typical issues include:

1. Difficulty in getting billing and reimbursement details from caregivers and insurers
2. Coding of invoices to maximize caregiver insurance reimbursement--not always accurately reflecting what was done
3. Frequent rejection of charges by insurers, causing the patient to intervene to try to not pay more than is appropriate (a difficult task--see issue #1)
   
4. Onerous collections procedures (at my former company, we used more care and respect in trying to collect a $10 phone bill than many caregivers and hospitals use in trying to collect bills amounting to hundreds or thousands of dollars--bills which are usually in dispute)
5. 200-300% price differences between insurer-negotiated prices and those consumers must pay for the same product or service
   

In the Journal article, there is a happy ending--sort of.

Earlier this week, Mrs. Dawson was contacted by a CPMC official with surprising news. The hospital said Mr. Dawson had qualified for financial assistance under its charity-care policy and wrote off his entire bill. Asked why the Dawsons hadn't been told they could qualify for charity care before a reporter contacted the hospital, CPMC said Mrs. Dawson never gave it the opportunity to explain its policy to her.

Of course, blame the customer. That is an old strategy which my wife and I have encountered often in working with the health-care system.

So while I can't argue with Prof. Mankiw's math, his figures reflect broad averages which bleach out the real pain and injustice suffered by many. (Prof. Mankiw has been fortunate enough to have two of the world's great health-insurance providers--the Federal Government and Harvard University--as employers.) And, I would wager, given that companies are pulling back more and more on their health-insurance benefits, more people are becoming responsible for management of their own health care--meaning an increasing number of people will get to experience that pain and injustice, unless the system gets some real reform. (Politicians, please read the Porter/Teisberg paper!)

The averages say the situation is fine. The stories paint a very different picture.

We expect from the health-care system compassion, fairness, respect and dignity. Often, in the doctor's office or the hospital, we get them. Once the subject shifts to money and payment, however, they vanish into the air like smoke.

healthcare, health care, insurance, reform, customer service, Wall Street Journal

If you want to find innovation, don't look for market share

Here's a blanket generalization: market-share leaders don't innovate.

Exhibit A is the cellphone industry. The real innovation in the US mobile market is coming from T-Mobile, the fourth-largest operator. We discussed its combination WiFi/cellular package in an earlier post, and today the Wall Street Journal wrote that T-Mobile is the most enthusiastic operator partner of the Google-led Android alliance, seeing in it the opportunity to develop a distinctive user experience. And to help create innovative and better integrated services, T-Mobile is getting more involved in its handset manufacturers' design process.

One question is, why can't leaders be more innovative? The most straightforward explanation gets to the heart of the leader's paradox. Feeling they have more to lose causes leaders to become more and more conservative, settling for incremental upgrades and not seeing (or not valuing) the new and bold.

Fear of cannibalization also inhibits innovative thinking at market-share leaders. The question "What's this going to do to all the people we've sold the old product to?" has probably doomed thousands of worthy innovation efforts.

While upstarts and companies who are trying to catch up are freer to act.

The leader who figures out how to instill this type of thinking in a market-leading company should win the Nobel Prize for Management.

innovation, mobile, Wall Street Journal, wireless, handsets, alliances

Luxury brand names - extensible everywhere?

For as long as there have been luxury brands, they have been trying to expand from their original niche to related - or unrelated - product areas. Remember Pierre Cardin cologne? It was a mainstay of TJ Maxx, a US discount store, back in the 1980's.

The owners of today's luxury brands will tell you they won't repeat the mistakes of the past, where licensing mania resulted in the above-mentioned cologne and plenty of other failed products. Yet as described in this Wall Street Journal article, "Like Our Sunglasses? Try Our Vodka!" by Christina Binkley (link - $$), they're at it again. Roberto Cavalli Vodka, Ferragamo watches (no, you don't wear them on your ankle), Bulgari hotels. There's no limit to what designers and their bankers will put their name on.

The designer-store trend helps to urge fashion companies to diversify. How else to fill up all those shelves and give people the opportunity to indulge in accessories to go with the outfit?

This trend, too, will peter out. The Bulgari hotels will become Hiltons, Ferragamo watches will take their rightful place on the shelves of TJ Maxx. But as long as it lasts, designers can luxuriate in seeing their names plastered over all kinds of random goods. And who wouldn't like to see her name on a fine bottle of premium vodka?

Friday bonus quiz: Which of the following items are actual designer (or designer-licensed) goods?

1. Versace dog collar
2. Bill Blass Lincoln Continental
   
3. Fendi litter box
4. Burberry dog collar
5. Louis Vuitton dog collar
6. John Varvatos aftershave
7. Marc Jacobs pop-up tent
8. Gucci dog collar
9. Armani keychain

(answer: all but 1, 3, 7.)

(Photo: Marc Jacobs canvas backpack via fabsugar.com)

(Disclosure: I have just learned that the author of the WSJ article, Ms. Binkley, formerly wrote for the Wilkes-Barre Times-Leader. My wife grew up in Wilkes-Barre, PA.)

fashion, licensing, marketing, retail, Wall Street Journal

There's no such thing as bad publicity

A few years ago, I was at a party in New York City and there I met an older entrepreneur. We got to talking about public relations and newspapers and so forth and he recounted a story to me. He had been interviewed by the Wall Street Journal for an article in their newspaper and when he saw the article a few days later he was appalled. He'd been misquoted, the article was negative in tone and it just wasn't at all what he had anticipated.

He was really disappointed and depressed and he was trying to figure out how he could do damage control on this terrible article. Anyway, over the next several days, he kept getting congratulatory phone calls and emails and people he'd meet on the street would come up to him and say, "Hey, great article in the Wall Street Journal the other day."

He told me after that he never worried about trying to spin public relations. He just did his thing and whatever came out was OK.

Voice-to-Screen messaging - powered by SpinVox

spoken post, public relations, Wall Street Journal, marketing

How to read a web newspaper

OK, so I know that everything on the web is miscellaneous. But I've been wondering why I interact with two highly similar web sites so differently.

I subscribe to both the New York Times and Wall Street Journal newspapers, and read both online (especially when traveling, like today).

When I read the NYT online, I meander through the sections--sports (yay Red Sox), technology, business, arts, books. Pretty much in that order. I just about never read the front page. I go right for the detail.

With the WSJ online, I invariably seek out the button that says "Today's Newspaper." Clicking this loads a page where articles are listed in the order they appear in the paper, with page number headings--A1, A2, etc. It's not laid out like the paper, but for example Marketplace is the second section, starting with page B1, just like the hardcopy edition.

Why do I use these two sites so differently? In part, I've always navigated the Times miscellaneously. (Sunday paper reading order--sports, arts, books, business, week in review, styles, magazine. I recall my astonishment seeing my friend Gerry Halstead read the Sunday Times front section once, beginning to end, each article in full. It took him a good hour.)

But I do read the Journal in order: section A (glance at the op-ed page but not too closely so I don't get annoyed), section B, skip section C (not enough investments to worry about that), section D, if at all, over lunch.

And so it is online. The cool thing about the web, and with well-organized web sites, is that the user can choose. Read it our way, read it your way. Whichever you prefer.

organization, knowledge, websites, New York Times, Wall Street Journal

How significant is Boeing's 787 delay?

The Wall Street Journal reported today (link - $$) that Boeing has pushed back the launch of their 787 Dreamliner aircraft by six months, due to delays from partners supplying key subcomponents. Boeing's stock fell nearly 3% on the news.
But what's the long-term impact? Using the framework set out in "Reinventing Project Management," by Aaron Shenhar and Dov Dvir, we can evaluate the project and get an idea of the long-term cost of a schedule slip. (Here is a prior post on this book.)

"RPM" looks at projects over four dimensions: novelty, technology, complexity, and pace.

Novelty: on Shenhar and Dvir's scale of extension, platform, breakthrough, the Dreamliner project is a new platform.

Technology: on their scale of low-tech, medium-tech, high-tech and super-high-tech, Dreamliner is high-tech--using technologies proven in military applications in commercial aircraft for the first time.

Complexity: scale is assembly, system, array. Dreamliner is an array project (most new product developments are system projects, but given Dreamliner's unusual complexity--e.g., subcontractors work on their pieces across the world, then subassemblies are shipped for final assembly to the US inside 747 transport planes, I'd rate it an array project).

Pace: on scale of regular, fast/competitive, time-critical, blitz, the Dreamliner project is fast/competitive--typical of new product introductions.

The "RPM" map, then, would look like this.


Projects of array complexity in particular are subject to delays. As mentioned in the WSJ article, Boeing's extensive use of subcontractors lessens the control it has to respond to issues in the supply chain. (See this prior post for discussion about how outsourcing, regardless of its benefits, lessens direct control.)

But the Dreamliner will be a platform that contributes to Boeing's income for thirty years or more, if the 737 and 747 are any predictors. So on the face of it, a six-month delay is not significant.

What would be significant is if the project management approach that Boeing used differed from the needs of the project. As far as I can determine, Boeing knows what it's doing. The biggest risk would be to rush the plane out prematurely, in which case any operational problems would raise questions about the suitability of the entire platform. Paradoxically, announcing a delay should raise confidence in the project, as it demonstrates that Boeing won't put the plane in the air until it works.

So, a six-month delay is... embarrassing? yes. Costly? yes, in the short run. Long-run significant? No.

project management aviation alliances reading list Wall Street Journal