Monday, 29 December 2014

The eight traits of a digital business

I'm using the lull between Christmas and New Year to gather my thoughts from 2014. It's been a crazy year: it feels like digital has finally hit the boardroom agenda in a more fundamental way than a technology or marketing investment. 'Early adopter' leaders understand that there are radical productivity and competitive advantages to adopting a digital culture and are thinking how to create one.

That's not to say that I haven't seen a large number of executives and boards who want to brand a vanilla technology or go-to-market tweak as a radical digital initiative. It may surprise you to know that I have no issue with the latter approach to growth - I'm not a zealot and frankly many organisations do not yet face an existential crisis caused by the digital economy. Still more simply don't have the operating platform (capital, cultural, technological) in place to make any sort of radical change. The trouble is that if you brand something as a fundamental change then people will expect one. It's better (in my view) to be honest and say that now isn't the time for radicalism and reserve the opportunity to make the major change later.

Anyhow, one of the most subjects I talk about with organisations is what a digital business looks and feels like. Inspired by a colleague who came up with his own 'traits of a digital business', I've jotted down eight themes. I'd be interested in any of your views on how these are framed...

  1. Think exponential: dedicate resources to finding 10x ways to enhance productivity. Accept that some of these ideas will fail and embrace the lessons from them.
  2. Acquire digital capabilities: Combine new skills with the best existing talent to create digital teams that demonstrate the practices that the organisation is trying to achieve in the long term.
  3. Execute lean: learn to do everything in short sprints, from radical innovation to mundane processing. Empower team to enhance, pivot and kill tasks.
  4. Emphasise communications: select and incentivise leaders to understand, embody and promote the digital change. Create structures to actively engage everyone with digital working practices. 
  5. Put people first: always think about what outcomes people need and want first, not about existing processes, products and services. Your own people are as important as your customers.
  6. Use new ideas to solve old issues: look for new ideas to solve old issues. Don't be blinded by the status quo. Don't be deceived by the Tyranny of the Business Case.
  7. Design work as well as Design Thinking: design is the differentiator in digital, but most important is the combination of talents that deliver it. Remember to focus machines on the systematic, humans on the empathetic.
  8. Focus on value: don't get distracted by beautiful design or shiny technology: focus on value for shareholders and understand that people need real incentives to change.
That's where I am right now. One thing I definitely need to get in there is the value of generalists over specialists. I worry that many people associate winning in digital with the acquisition of deep, narrow specialists such as data scientists, coders and creatives. Those are all important, but the real niche skill that's required is the broadest - super-smart, inquisitive and creative generalists who bind things together, keep things focused on value and ultimately lead projects to completion. There are remarkably few people like this. Finding and developing some more is just one of my challenges in 2015.

Hope that was interesting!

Thursday, 27 November 2014

Using the digital portfolio framework - a recent example

Last week I wrote about a simple framework we're using to help organisations manage their digital portfolio.

A client situation I often find is misalignment between how value is generated in the core and how the more radical innovation is structured. In one recent case the business appeared to make the majority of its money from selling products to middle class women, 30 to 45 years old. They had a couple of digital initiatives, which I'd classify as 'top left' - they did access a new type of customer with a new model, but were being delivered in a traditional operating structure.

One of these was a high end D2C retail site aimed at rich, typically older men; the other an experiential site that showed 'power users' of the products how to use them in a more sophisticated way. The latter had no sales functionality although it did enable links into 3rd party e-commerce.

There were no hybrids and the innovative businesses were located in different countries to each other and to the core.

We discussed a number of issues, in order of appearance:
  1. It was not obvious how the (unclear) goals of the innovative initiatives supported enhancement of the core business as they were aimed at totally different customers. This could be okay if they were aimed at accessing a lucrative new customer type, but it wasn't apparent that this was the case
  2. The portfolio was too small and each of the two initiatives in the innovative area had cost bases more appropriate to proven, scale businesses. There were no clear investment gates to decide to double down, pivot or kill the initiatives
  3. The portfolio had multiple points of leadership so prioritisation was very hard
  4. Talent in the innovative businesses wasn't appropriate, but had instead been transferred from the core and had to learn how to trade the new businesses from scratch. They weren't set up for success
  5. No structures existed to take learnings from the new initiatives into the core or to trial them on larger groups prior to that
Our discussion centred around setting objectives and investment gates for the existing portfolio and how to add new innovative initiatives that broaden the base of learning around the future needs of today's core customers. The other interesting part was around whether there was any need for an innovative way of delivering the new initiatives so that the business can learn about radically more productive operating models... 

I'll leave that there because I don't want to give away too much information. My closing comment would be that the 1-5 portfolio issues are not in any way unique to this business. When you draw initiatives out on the framework and try and link them together with simple measures, like customer type or profitability you can quickly see where the surgery is required and have a really sensible discussion about how to restructure.

Tuesday, 18 November 2014

Digital portfolio strategy: how to use 70:20:10

I thought it'd be useful to write a little about a little framework we've started to use quite a lot in Digital Strategy to categorise digital activities in an organisation's portfolio.

The background to this is in the work we do to align executives on what digital means in their context and where they have capability gaps. We tended to find a couple of common issues:
  1. No one leader has a complete view of what digital ventures were being taken across the business
  2. There are rarely enough truly innovative projects...
  3. ...and those that there are tend not to be directed at specific corporate goals
  4. Organisations lack a means to take the lessons from innovation and apply them to optimise the main business
In my experience about 70 percent of the energy (capital, time, attention) of a business should be directed on optimising the core activities. These are pure return on investment (ROI) calculations where a simple business case can be created. At the opposite end, ten percent should be on hedges against disruption and attempts to create 10x improvements through active disruption. These are return on risk (ROR) decisions made up of individually smaller initiatives that need to be managed like a venture portfolio. Between these two categories are the remaining 20 percent, which are hybrids that use semi-proven concepts from the ROR portfolio to extend the core. In the long term you hope that these can be used to enhance the entire core.

Hopefully the above makes the framework very easy to understand! To use it requires a detective process that uncovers all of the digital investments that are being made and places them on the framework. The axes are designed to give initiatives that enhance efficiency with digital practices and technology as much prominence as those that grow the top line.

What you'll find is that there are likely to be only a few initiatives that actually fall on the diagonal where radicalness of the concept matches the radicalness of the operation that creates it. That's fine - the purpose of this framework is to lead to a conversation about:
  1. How to reduce duplication (particularly in heavily matrixed organisations)
  2. The objective of innovation within the organisation - what 'moonshots' are going to radically enhance delivery of the strategy?
  3. The range of operating models at play and whether they match the evolution of the business
  4. How to make sure that ideas funded in a 'Series A' in the Disruptive Zone can be prototyped in a larger scale in the Hybrid Zone
  5. What outcomes the organisation is after in each zone and how those can be measured
Having baselined the situation using the framework, new digital initiatives can be classified and decisions about the way in which they deliver targets can be made effectively. Hopefully having clarity over the latter will reduce tension about the ownership of innovative initiatives - wherever they sit, they should deliver the corporate strategy and there should be clarity about how they will be incorporated into the operating practices of the core, killed or spun out in the future.

Setting up an organisation to do all of that isn't all that easy, of course. I've written about that particular thorny issue in the past... and if I find a minute in the next few days I'll write about a few new ideas we've been working on with clients.

Tuesday, 7 October 2014

What we need is a ChangeBit

I finished reading Dave Eggers' novel The Circle the other day (aside: it's not bad, although nowhere near as close to the bone as some observers would have you believe). I was reminded of one of the central ideas to the novel in a chat with a colleague and that sparked a thought: if we can measure (and gameify) our fitness digitally in real time, could we do the same with our work? Or, in less management consulting language - is there a Fitbit for workers?

In The Circle, employees of the eponymous firm are ranked on their participation in a range of internal and external communications. Their influence in the firm and the digital world is measured in real time as a proxy for their success in the social media firm.

In the book, the score is a fairly simple numerical rank made up of a few key underlying metrics ('smiles', referred sales...). The key part that I like about the PartiRank idea though is that the employee takes personal control of their score. Most of the Big Data internal effectiveness metrics concepts I've seen are the opposite - the employer has a central analysis team that monitors everyone and picks up transients. So if it works for fitness (if it does work... I'm skeptical that Fitbit and it's equivalents actually have lasting impact on most of their users), then perhaps it can work in simplifying the bewildering change from a process to an outcome-based business.

Now the sticky subject of what would go into the metrics. It has to be easy enough that the user can understand how to improve. In starting to think about it I also realised that there's quite a lot you can do with the basic communications tools in the office, before you even get to more bespoke or task-specific applications. Here's some ideas:

  1. Path length of emails after they've been sent (by which I mean how many emails are sent before the thread terminates, which is a loose proxy for solving problems)
  2. Average number of people copied on emails... a tricky one, because although it's good to be participative, large numbers of people infers that decisions are being excessively democratised and thus nothing will be done
  3. Diary structure, I think that there will be patterns to people's schedules that hint at how productive they are; for example, an overly fragmented diary suggests that there's no working time and possibly too much delegation... in any case there may be productive patterns for specific roles
  4. Proportion of internal vs external communications, hints at partnering and ecosystem behaviour
  5. Positively-rated posts on internal social networking... this is where it gets dangerous as the potential for gaming the system is high!
I also wonder whether the 'time in motion' analysis side of fitness tracking might also be interesting as it infers time on your feet, which might be collaboration time. Or it might not. Any system like this has to be simple to use, which means that it tends to be only directionally helpful. 

In thinking about it I did notice that we employees have very little sight of our data within companies. It's spread all around different pockets and tends to be hidden in tabs of an SAP system or just not available at all. I'd love to understand more about my own usage of technology and how it loads the organisation. The effects of hierarchies and spans of control are difficult to see from a single point of view and feedback systems aren't very useful or real time...

...the latter is another huge weakness of employee assessment systems. They typically happen on a six monthly or annual basis and are based on largely qualitatively measures. Over the years I've become increasingly frustrated by subjective conversations about potentially objective matters around performance during our review process. I don't think it's a bad system, either. Many businesses seem to do without any evidence of employee performance at all. So maybe we need a ChangeBit.

Tuesday, 5 August 2014

When designing an operating model for digital, keep an eye on your cadence

A non-trivial amount of the work we do in Digital Strategy at the moment is focused on the design of digital operating models. I don’t particularly like the name, but the sentiment is about designing a business fit for the New Machine Age. As I’ve mentioned before, this philosophically means that it ultimately needs to become outcome- rather than process-centric. Making that happen means applying some new organisational and operational concepts to the business, one of which is an idea we’re beginning to talk about a lot: cadence.

Cadence basically means the rate at which you do things. Businesses always have them. They’re part of the culture. In a PLC, they are quarterly to match the reporting cycle. In the public sector they’re often annual. In digital startups they could be as fast as weekly, to correspond with the tempo of an agile delivery ethos. Usually though a business has a natural speed and struggles to operate outside of it. The public sector struggles to act outside of the annual plan; startups struggle to think even as far ahead as a year.

This is problematic because even if you are able to design work to have the right combination of people, the processes that surround the work operate at the typical speed (and thus precision and robustness) of the rest of the business. So the formal or ad-hoc design of the route to an outcome is compromised.

What we do to solve this issue is pretty self-explanatory. We build teams that are designed to operate at a particular cadence, then we build functions around them that are designed to operate around them at that cadence, so that the finance and procurement teams that surround an agile digital development team can operate at the same rate rather than trying to cram a monthly or weekly request for resources into an annual budgeting process. This is a development of something I’ve talked about here before – the necessity to break up functions like finance and HR into their functional components, rather than assuming that because they deal with ‘money’ or ‘people’ they should all have the same reporting line.

Clearly you can’t have endless fragmentation of speeds. Two or three is probably right to start with. We usually go for something annual to deal with things like infrastructure; something monthly to deal with iteration of the business and the build of new initiatives at a relatively small scale (this is the majority of the business) and then something multi-annual that looks at the horizon for new innovations, acquisitions, strategic repositions and the like. The latter is important as my observation of my clients is that many have lost the ability to do real strategy as the requirements to report to markets and create financial plans have grown.

Which brings me to another cadence-related issues. The need to produce anodyne quarterly reports for investors is a costly and disruptive blight on listed businesses. Perhaps we’d be better moving to a world where businesses are transparent about their numbers to their investors on a daily basis (letting them know as they do so that there is a degree of imprecision in the numbers) and that they’ll reconcile everything annually?

Controversial, I know… we’re probably not adult enough as an industry to adopt it. Ah well.

Thursday, 24 July 2014

Digital in the talent acquisition process

I’ve been doing a really interesting case with a client recently, helping them to use digital to reduce their expenditure on third party recruiters and simultaneously increase the variety and quality of new recruits that they obtain. Here’s a few high level thoughts from the work…

The first - and perhaps most obvious – principle is that it’s time to treat employees and potential recruits like customers. Understand their archetypes and needs and engage them on their terms. Using classifieds or Linkedin only gets you to about half of the direct recruiting community and if you’re after graduates or under–35’s, you will need to think about how you use Facebook, Instagram and Twitter in combination. If you want scarce talent, you’ll need to seek them out on their own terms and be proactive in targeting them. 

Information in recruitment is now symmetrical and good people – hell, all people – are being constantly bombarded with interview offers thanks to a horde of recruitment consultants (sensibly) seeking to profit from the situation. Talent is scarce as the focus on creativity and outcomes in the digital economy means that people, rather than process are ever-more vital to the success of organisation. HR departments need new skills, such as content creation, digital marketing, data science and user-centric design in order to understand the capabilities of more diverse talent.

In light of these factors, the old model of HR, where talent acquisition is rolled into the general HR functions is perhaps nearing obsolescence. Instead it could be time to split the operating parts of the department, for example. reward and benefits from the strategic parts in the same way as digital teams are splitting the fast-moving innovation and product design components of IT from core infrastructure to make the former more business-centric and the latter more focused on efficiency.

The strategic talent function would  align the organisation, talent and culture of the business to the corporate strategy and then work with other parts of the business to trial novel ways of identifying, measuring, selecting and deploying people in the organisation. Philosophies like test-and-learn, agile and lean start up can be applied by this team to enable growth. Targets and governance should be set more like those of a Product Commercialisation Business than of a traditional HR function. Doing it this way also enables the operating functions of HR to be more effective as they can focus on enhanced efficiency of known processes and bedding any new ones that come out of the more strategic team into common practice.

This splitting of functions is a consequence of moving to a more measurable, outcome-based way of working. With less emphasis on hierarchy, completely transparent objectives and easier inter-operability of teams it’s fine to have small pockets of real specialism. 

There is an immediate question for me about how those teams are assembled though. Traditionally you’d have reporting lines and human hierarchies to organise the business. The most logical way for the digital business to be structured is as a collection of spans of control, arranged in a hierarchy of outcomes.

If this sounds like management gobbledegook, that’s because I haven’t really got my head around how to create it in practice! What I’m trying to remove is the large group of people that are employed to manage the hierarchy of a business rather than the outcomes the business needs in order to win. Clearly I haven’t come up with the answer yet… and this head cold isn’t helping!

Friday, 11 July 2014

What I've been reading this week

A few stories I've been reading this week (due to a Blogger fail, I lost rather a lot of others :(. )

Digital world

It's fashionable to suggest that Android Wear has rendered Google Glass obsolete. I'm not so sure. If you believe in a Design Thinking approach, then this is the difference between the iteration of a known, successful category and the beginning of a new one. The miracle here is actually that Glass is as good as it is, not that Wear is functionally superior in many respects. It's sort of like comparing the self-driving Google car with a similarly priced conventional vehicle. Allowing for development costs, that's something like a Bentley Continental. One is an ultimate expression of something that we've known how to do for years. The other is disruptive innovation. Move the development forward ten years and their ancestors will be radically differently positioned relative to each other.

One of the commonly talked about use cases for wearables is to collect data on people's wellness in order to reduce hospital visits and insurance premiums. Here's a case study from a US consulting company that's using Fitbit to do just that - it's saved $300,000 a year. Impressive!

One of the issues with home automation is that most people in the developed world already have a full set of unconnected gadgets that they're unlikely to do away with. But where there's a will, there's a way. In this case by using an add-on device to connect air conditioning units to wifi via their infrared remote control units. Simple genius... also interesting to see the way in which other technologies have enabled them to get to this point. The original was based on a Raspberry Pi.

Digital strategy

Facebook buys LiveRail to extend its portfolio of ad-serving options and apply pressure to Google, Microsoft et al in the battle for internet ad dollars. I don't pretend to understand the subtle differences between these platforms, but the continued aggressiveness companies like Facebook display in the acquisition market suggests that there's to be no let-up in the multi-dimensional competition between the superpowers.

A little bit odd, but here the Chief Experience Officer of sprinklr explains why he buys the toilet paper. I totally agree with his point that in the social age every single part of the customer experience matters. Everything has to embody your brand. My favourite piece of branded user experience is the intermittent wiper speed dial on my 1995 Porsche. It's a totally insignificant function on the car and hidden away, yet it has a feel that must have taken ages to get right and money to fit. That's the sort of attention to detail you need nowadays...

Digital future

Artificial intelligence has been 'tantalisingly close' for a generation now and yet we still can't make a machine that passes the Turing Test, long seen as the defining point at which machines will have become our intellectual equals. But does it really matter? Here, Singularity Hub presents the case that the test itself is irrelevant and that: we can’t prove “a machine thinks” any more than we can prove the person next to us thinks. But when one is indistinguishable from the other, then we are allowed to question whether a machine can think only as much as we are allowed to question whether a human can think—and beyond that point, the question can be resolved no further. I found it an interesting argument.

3D printing is one of the key technologies of the Second Machine Age because it enables the fruits of our intellectual labours to be rendered in the physical world without the need for learning craft and manufacturing skills. The sophistication of 3D printers advances at the rate of Moore's Law meaning that we'll see a lot more stories like this one about the printing of artificial human organs in the coming years. Replacing body parts will extend our individual longevity, leading to ever-more different life expectations and thus further economic change. Hopefully.

One of the principles of the new economy is the use of machines to extend our intellectual limits. Often this is about replacing basic intellectual tasks with the output of AIs or semi-sentient systems, but there are other ways. In a series of experiments US Military scientists have been using (gentle) electrical stimulation of the brain to enhance the speed at which people can learn new skills and make their reactions to situations more automatic. This is a fascinating article and although slightly disturbing, the technology could be of huge benefit to people adapting to new ways of working - in my experience, most traditional training is fairly useless!

Wednesday, 11 June 2014

Cultural interplay for happiness and effectiveness

I was talking to a couple of colleagues about how to change the culture of businesses the other day (as you do). Someone commented that they didn’t know how to make the culture of a client ‘digital’. His implication was that there needed to be uniformity of culture in order to succeed at making a transformation to a more productive operating model, which struck me as odd. Why would cultural uniformity be a good idea? What business actually has that today?

What’s a 'digital culture' at all? Is also a good question. I currently describe it as something that’s outcome centric, that has hierarchy that serves to resolve areas of debate rather than for command and control and devolves leadership to everyone in the organisation based on philosophical alignment about what needs to be done. My description changes quite a lot, it’d be fair to say, but this is the June 2014 version.

What about cultural uniformity, then? Well, I started to think about this and to be honest I couldn’t think of many organisations of any size where there was much uniformity. Usually different departments or silos have distinct identities based on the people who work there. Comparing finance to legal to sales to technology usually provides enough diversity to demonstrate the point. Where the cultures meet often causes issues as well. Sales targets are generally short term and tactical, whereas those of a CIO might encompass projects lasting many quarters or even years. Even sales (tactical) and marketing (more strategic) are likely to have different types of people, therefore different cultures. Businesses are bundles of cultures and philosophies, the relative prominence of which ebb and flow with the vagaries of the economic cycle and the nature of leadership. 

I’m not actually convinced that this needs to change, either. The beauty and the benefit of a bundle of cultures is in the interplay between them. That interplay brings the strength of multiple perspectives to a goal. Another thing about digital organisations is that the structure of the organisation is built around the people, rather than forcing the people into the structure. Therefore the culture of an effective finance department needs to be somewhat different to the structure of an effective sales team. They do, however, both need to be outcome, rather than process-centric. An important point, since years of ‘six sigma’ and ‘target operating models’ have left the world with very thick operating manuals and not a great deal of focus on that it’s trying to achieve.

Trouble is that making processes outcome-centric doesn’t necessarily solve the problem of making bundles of cultures interplay successfully. At most levels of an organisation the outcomes are relatively simple – abstract ones that aggregate performance to enterprise value tend to be the preserve of the Boardroom table and in any case aren’t desperately useful for executing things at a tactical level. 

The next question I asked myself was: how to solve this and maximise the benefit of the interplay? I have four ideas:
  1. Strategically, think of the organisation as layers of bundles: business model, culture, technology etc… and seek to design it so that efficacy at each distinct model within the bundle is emphasised. Use digital as the glue between the bundles and the layers (not as a single all-seeing system, but rather as a way of bringing together un-standardised data and making something from it)
  2. Tactically, set up outcome measures for a project (which is typically where interplay occurs) that have a single master outcome, linked to specific outcomes for the individual departments. Everyone’s performance on the project is measured equally by delivering their own outcome and the master. Everyone knows what’s going to make everyone else happy and gets an insight into what makes them tick.
  3. Strategically, establish common ways of working across the business, using common systems. This is particularly important in complex organisations that have stovepipes systems for accomplishing particular workflows. These systems and their attendant processes mean that progress on tasks can be opaque to people outside of the silo, creating divisions and lack of understanding.
  4. Strategically, promote distinct cultures within different functions of the business. Take the time to construct the right physical and cultural environment to support outcomes. Give them distinct identity and don’t homogenise the people side of the operations alongside the technology and supporting systems.
Where digital plays in all of this is by giving access to measurement of outcome and obtaining insight from unstructured data. Up until a few years ago it was really hard to actually measure the efficacy of an organisation… hell, it still is, but it’s getting easier all the time. The main barrier is lack of understanding… breaks in the interplay between technology, strategy and the rest of the business, perhaps.

Anyway, enough of the ramble. My conclusion is this: the digital culture is not actually a single culture at all, but a beautiful melange of cultures that make all of the people who work in and around a business happy and effective.

How about that for a headline? Thoughts, as ever, much appreciated!

Thursday, 29 May 2014

Where to start with digital strategy - build a digital trading platform

One of the problems we've found with digital strategy thus far is how to get organisations started. There are so many ways in which digital can transform a business, from radically transforming sales and service to automating a swathe of back office tasks that it can be overwhelming and doing nothing or something too small is tempting. To us as well, at times. So I've been thinking about the best way of biting off a meaningful chunk - these are thoughts in progress so comments are even more appreciated than usual!

The first question I came to was whether to start at the value generating centre of the business or in a costly but unsexy back office area. My conclusion is the former. Why? Because energy and momentum is a crucial part of the journey to a digital culture and it's easier to advertise that direction somewhere visible. It's also arguably easier to make a conventional (basic ROI) business case in these areas - the cost of back office functions is often very murky in a pre-digital environment.

What's that value centre? I've always liked Hagel's model for abstracting the purpose of a business ( which gives three models:
- Infrastructure management
- Customer relationship
- Product commercialisation
The theory goes that you can't bundle more than one together and still retain focus on performance of the whole. I'll come back to that idea another time, but it's a decent model for my next thought, which is as much semantic as anything else.

One challenge with digital strategy is that it's actually strategic! The basis of success in the economy is changing radically and entire business models, organisations and cultures need to change over time to adapt and succeed. That's hard when dealing with organisations with hard short term targets. So the way I like to explain the first part of digital strategy is building a 'digital trading platform'.

What does that mean? I see it as an trading platform designed with from scratch with digital, measurable and automatic technologies as the default, as opposed to a set of technologies used to marginally enhance the old ways of doing things. It's process and technology and the operating model, organisation and culture needed to trade that platform effectively. The results should be a step change in value creation in terms of efficiency, sales performance or IP generation & monetisation, depending on the organisation's business model.

Why the language? Because it's all about focus on making money where you make it today, in a radically better way. Reinvent the things you know how to do today, rather than seeking value in things you don't understand using strategies you don't understand. Pick one thing to learn at a time! And in doing so, you'll find out a lot about the new skills, practices and organisation you'll need to transform the rest of the business. 

Wednesday, 28 May 2014

Self-drive & instant translate: two remarkable tech stories

The last couple of days have seen two remarkable developments in digital that I thought were worth covering.

First, Google announced that it would be making 200 prototype self-driving city cars to its own design. Second, Microsoft revealed its plans to put he natty instant translation tech it showed off in China a couple of years back into Skype. Why were these titbits of news worth interrupting my holiday for?

I've long been an advocate of self-driving vehicles and Google have long been the visible face of the technology. Their announcement will undoubtedly spur others to launch their own vehicles, most likely including Tesla, who have done for propulsion what Google have done for guidance. I would be now very surprised if a fully self-driving car was not available for purchase at an electric-sized price premium (c. 50%) vs the equivalent conventional car before 2020.

Microsoft's translation announcement is also significant as it shows how quickly natural language algorithms have advanced. IBM's Watson (2012) does the same sort of processing in a super computer environment. Now the same will be available in the cloud for mass use. 

Both this and Google's car are graphic illustrations of Moore's Law. The self drive technology was $80k in 2012. Now it's likely under $40k. Companies that are able to dominate the business models of a Moore's Law market are able to disrupt other markets like never before, leading to the type of multidimensional 'superpower' competition that I've written about previously. 

For most organisations this means investing in software and hardware IP in their business processes and products. The big tech question is when Apple are going to respond. 

Tuesday, 20 May 2014

Future of news - Arab Media Forum

You might remember that we've been doing a series of consumer research pieces with the Associated Press on the future of news in various regions. This leg of the journey took us to the Middle East, where we covered three markets: UAE, KSA and Egypt. I presented this at the Arab Media Forum this afternoon.

Major findings:

  • Middle Eastern residents are avid consumers of the news - on average they'll take in 72 minutes a day, which is the same as their counterparts in Europe
  • Trust is the most important driver for selecting a news channel. Interestingly, speed is almost irrelevant - only six percent of respondents said that it mattered, which goes against traditional thinking...
  • ...and probably reflects the fact that social currency from news is gained by depth of understanding rather than being the first person to hear about it
  • Half of online news users discover stories on social media and 45 percent of users share a story at least once a day
  • This reflects the importance of news as a conversation starter - 97 percent of people talk about it regularly, principally around the dining table (67%). Those closed door conversations have not yet made it online, perhaps because of privacy concerns
  • Video is becoming an important part of the online mix, but would be more so if technical quality increases
The report isn't due for a few weeks, but at the moment the findings point to a market that has thus far embraced social more than video, perhaps because of relatively slow connections (excepting UAE), which allow for opinion sharing but not rich media. For the region's news organisations it means that there is significant opportunity in replicating the tactics and strategies of more advanced markets as connectivity improves - the audience already exists and is savvy.

Friday, 28 February 2014

Mobile World Congress – Two Good, Two Bad

I’m still trying to sort my thoughts about the Mobile World Congress. To start with, here’s my Match of the Day style summary of the two best things I saw at MWC and the two worst things I saw at MWC…

I liked: Ubuntu Tablet

Ubuntu is best known as a server O/S, but they also offer a smartphone and now a tablet version of the open source O/S. The tablet version is extremely slick and easy to navigate: apparently they have some partners ready to launch hardware for it this year (although it installs seamlessly on a Google Nexus tablet). I know it won’t catch on, but it was still really nice to see some innovation in interface design.

I didn’t like: the way the industry is missing the point

Mobile is the hot topic in many industries, particularly when it comes to providing very localized sales, marketing and other services. The cellular industry is in a prime place to enable this sort of new commerce market. So why was it nowhere to be seen at MWC? Because it seems that the success of pure web businesses as brokers and market places has got the mobile carriers thinking the same way.

So this year it was all connected cars and healthcare. Interesting, but way on the horizon for the mass market. Local commerce is now. I was expecting more. Now I’ll have to make it up for myself. Annoying.

I liked: the $50 smart phone

A lot was made of the Mozilla smartphone at $25, but I thought it was a bit crap. At $50, Nokia’s new full screen Asha is an incredible device for the price and carries a brand that is well respected in the emerging markets where people are trading up to smart devices. I hope it sells well for them.

I didn’t like: Huawei’s ‘friendly image’

Huawei do seem to delight in behaving like the bad guys. Not content with acting as the signals intelligence department of the Chinese government (this is a joke, before y’all get started!), this MWC they went on a charm offensive, sponsoring the lanyards and taking over a quarter of Hall 2 with a massive corporate entertainment area… into which they only allowed important dignitaries and turned everyone else away with the largest, most aggressive bouncers I’ve ever seen. Excellent for the brand image.

Tuesday, 25 February 2014

Mobile World Congress Day 1, first impressions

I know the drill by now. Drink as much coffee as I can. Avoid any cooked foodstuffs.  The Nokia stand has the best freebies.

These sage pieces of advice hold true at MWC 2014 and, while my brain is still on a caffeine high, I thought I’d jot down my impressions of day 1 at the FIRA.

One – there are a lot of cars

From ZTE to Telefonica to Qualcomm, everyone in the value chain has cars on their stand. TF win the cool stakes by having a Tesla Model S, which is an awesome piece of technology… but although automotive telematics is clearly a market that they all want to play in, no one is doing very much of substance.

Telefonica provide a SIM card for the Model S. Qualcomm were showing off a stereo system and sat nav processor; ZTE an extremely weak connected car app. What I take from this is that cars are carrying much more computing and connectivity than ever before (no shit) and no one in the telecoms value chain has figured out how to make money out of them.

Two – there are even more health apps

I’ll try and write a more in depth article about this area, but to summarise, everyone who was showing connected car was doing healthcare as well. There were gameified wi-fi toothbrushes, gameified post-surgery apps, gameified… you get the idea. Again, the takeaway is that there’s big money in health and welfare and the exact value capture mechanism is unknown…

Three – phone and tablet innovation nowhere to be seen

Sad to report that literally no piece of hardware here has excited me. Phones and tablets remain black (occasionally colourful) boxes. They’re a bit faster, a bit curvier and a bit cheaper – the price point of a decent full screen smart phone is down to $50. But that’s it. The category is exhausted from an excitement point of view and although it remains profitable, we need something else to kick the industry on to another level.

I haven’t found Blackberry yet. Or seen one. I’ll let you know when I do!

Tuesday, 4 February 2014

IT departments are Microsoft's biggest problem

I read with interest Satya Nadella's first email to Microsoft staff as CEO. It's inspiring stuff and says a lot about his understanding of the future digital world that we'll  inhabit. He's much better equipped than Steve Ballmer to win in that world. He likes hoodies, for a start.

But Satya's got a problem, and that problem is one of Microsoft's strongholds: the corporate IT department.

I love all the words that he uses in his email - fun, excitement, clarity, the accomplishment of great things. Trouble is that the way most people experience Microsoft these days is at work. And that desktop and application experience is controlled by the IT department. And for the most part, that IT department will have created a "build" of services that stops the average Jo Bloggs doing very much that's exciting or fun.

Accomplishing great things is pretty tough on a glacially slow Windows XP, Vista or 7 machine loaded with bloated apps and locked down against anything remotely cloudy. Tough too when "bring your own device" schemes are letting people use a really exciting Apple or Android smartphone, or even a tablet as a work tool and a play thing.

This is a software powered world. Unfortunately for all the great ideas that Microsoft manifests through it, for the most part their vigour is extinguished by IT managers. The world never really sees the true Microsoft and until it parts the fog of enterprise IT I can't see it winning against Apple and Google in traditional IT. Even the Xbox seems to have fallen victim to design by committee. I, and many of my gamer friends have deserted the platform at this iteration due to the machine becoming a bloated "entertainment hub" at the expense of raw gaming power.

It's still the Xbox that Satya needs to look to, though. Microsoft needs another category and it needs it fast. Preferably one that's cool enough to be BYOD rather than enterprise IT.