Recently in Business & Management Category

So all of a sudden I cannot get to my svn repository. Hmm. I cant get to my domain either. Instead I get a big flashy GoDaddy page brimming with web advertisements.

Turns out my domain, registered with GoDaddy, had expired. I never got an email warning but sometimes that happens.

While trying to run the gauntlet of upsell adverts for unnecessary crap and renew my domain, I spent a little more time than usual at GoDaddy.

For kicks I watched a Bob Parsons video. What... a... trip...

This guy is like a middle-aged Marine sergeant. "We're not here for a long time, we're here for a good time." Kill 'em all and let God sort 'em out. This is the kind of guy up at dawn, unlimited energy and a never-ending stream of sayings.

On one hand it is most amusing. On the other hand, between the babes, he actually has some interesting stuff to say. His 16 rules (available in 3 sizes at the GoDaddy store) are pretty good.

Who would have thought the "brains" behind those terrible TV commercials had something interesting to say.

There are a lot of interesting aspects of a company’s culture. Malcolm Gladwell talks a lot about culture in his latest book, "Outliers: The Story of Success". Recently I have heard the phrase “company DNA” and I like that one a lot.

Companies rarely do well when they venture beyond their DNA.

In technology, we see this most readily in hardware/software comparisons.

Sony is a hardware company. They make good hardware but they totally struggle with software. The PS3 is a good example of a great hardware product that is totally hampered by software.

Conversely, we have Microsoft. Although Microsoft has made hardware for many years, they are essentially a software company. The Xbox has strong software, especially its networking code, but the hardware has struggled so much, they are a billion dollars or more in the red. So much money, that any other company would have long gone out of business.

Amazon is another tech company that is stretching their DNA. Amazon is great at supply chain management and good at web software. Hardware? Not so much which makes it is interesting to watch them struggle with the Kindle, their first hardware device.

Apple is one of the few companies that excels at hardware and software but even they have had some failures.

The idea of company DNA argues against the success of large conglomerates, companies that are really a collection of completely different businesses. Whether or not that is a hard rule, I think companies that stray beyond their DNA can expect to struggle and they will probably fail without a serious investment. The third Xbox will probably be a killer system but Microsoft clearly invested and struggled to get there.

The idea of company DNA can be applied to other cultural aspects too, not just the skills and discipline it takes to build different products, like hardware or software.

One can also look at the people and personality types that are rewarded and encouraged. Some companies have a culture of growing people and developing good managers. Other companies have “manage up” cultures where the most aggressive and self-centered leave others (the weak and the meek) behind.

Whether you are looking to invest, get a job or do a deal with a company, investigating their company DNA is a prudent thing to do.

The WSJ today had an article about research on workers in China. It turns out that Chinese people care about more than money. Hmmm. That took research?

If you dont know the concept behind Maslow's hierarchy of needs, you should. In a nutshell, money is the most important thing in your life until you have enough to satisfy your basic living needs of food, shelter, etc. Even with the migrant workers mentioned in this article, that amount of money is surprisingly low.

It stands to reason that every human being has a desire to be connected with others and to have their life mean something. Beyond the salary and the benefits, jobs give us something to belong to, something larger than ourselves to be a part of. Whether we are aware of it or not, most of us need that association. We need a tribe.

I am glad that research is showing that people, whether they are in China or the West, are more alike than they are different. In China's case, it is also interesting to consider how quickly the culture may be changing compared with say India or Latin America.

Misunderstanding the Chinese Worker

Western impressions are dated -- and probably wrong

By KATHRYN KING-METTERS and RICHARD METTERS

July 7, 2008

Wall Street Journal

Ask multinational firms to describe what motivates Chinese workers, and the responses are remarkably consistent: Money is the only thing that matters.

"Chinese have zero loyalty to their employer," one executive at a manufacturing firm told us. Said the general manager of a Shanghai hotel: "The most important motivator is money."

But those perceptions may be outdated and wrong.

Some of the disconnect between Western managers and Chinese workers stems from the fact that multinational companies formed their opinions of Chinese labor from their interactions with migrant laborers, whose main goal is to make enough money to give relatives back home a better life. Migrant workers account for a big chunk of the work force in China's special economic zones -- areas with more liberal economic laws where Western companies first set up shop in the early 1980s.

Although Western firms have since expanded into parts of China where workers have different goals and values than those of migrant laborers, many Western managers continue to cling to the belief that all Chinese workers value salary equally. Research conducted by academic Geert Hofstede decades ago and repeated in classrooms and by consultants ever since points in the same direction.

We believe, however, that major cultural shifts in China have changed workers' attitudes dramatically since Dr. Hofstede collected data on China in the mid-1980s as part of a world-wide study into how workplace values are influenced by culture. Major societal shifts -- the result of policies such as China's one-child rule -- have reduced the role of family, government, religion and neighbors in social networks. And with fewer opportunities to be part of a group or something larger than themselves, many Chinese workers are looking to their employers to fill that void.

I have had a lot of managers over the years and recently I have been reflecting on how to manage a small department.

There are a lot of ideas (books!) about management. If you put aside performance reviews, HR policies and the mechanical aspects of "management", there are two basic philosophies for first-line management.

Company culture usually determines which model is used and that starts with the CEO and moves downhill. The CEO picks a model and sets the tone. People who use their model are promoted; others are frustrated.

• The first model is a miliary one. You (the manager) are given a task and a set of resources (your team). Your job is accomplish your task with those resources and no excuses. The manager is in charge and the team are just a means to an end.
• The second model is the team model, as in team-sports. In this case, the manager and the team take the task as a given. The manager's job is to develop their team so that they grow and get promoted into better jobs. The manager's job is to be sure the team gets the task done while people enjoy themselves and feel like they are going somewhere. The same is true for the manager who is being developed by their own manager.

If you ask most managers, I would imagine they would describe theselves as the second type of manager. But in practice, two common situations get in the way.

One, fire-fighting. When its all-hands-on-deck emergency time, there is no bandwidth left for people development. The problem is that many companies are always in fire-fighting mode. Some company cultures cannot distinguish between executing on a plan and reacting. These cultures find that they are always reacting to the latest crisis (whether it is a real crisis or not) and they never get to other things that are important but not an emergency.

Two, weak or insecure managers. A manager cannot develop their team if they themselves are feeling insecure or threatened. For these managers, the last thing they want is to lose people especially the good ones. These teams find more fear than fun at work.

If these two problems are chronic, odds are that people are unhappy and turnover is high.

The military model works best in the military where the team has made a commitment (they enlisted), they experience intense social bonding and there is a clear hierachical structure. It works less well in a workplace because the workplace is less constrained and more open. When the going gets tough, people literally get going; they quit.

The team model deals more openly with change and more honestly with individual motivations and our desire to better ourselves. With the team model, one can have a conversation about pay and personal goals as well as about responsiblity. That kind of discussion wont come up in the military model.

The team model can be thought of like team sports where the manager is a coach and the employees are the players. This analogy makes mentoring easier. It is also easy to acknowledge that players leave (they quit or get fired) but the game goes on. If you are down a man the game doesnt end -- everyone just has to chip in.

The team model also deals better with fun. It is surprising how few place are fun to work at. (A few episodes of The Office ought to remind folks of the worst jobs they have had.) Fun has less to do with the company or the task than it has to do with attitudes and intangibles like camaraderie, teamwork, and humor. It is a lot easier to have fun if people feel people like they are in it together and working towards a common goal.

I just read a fascinating article about YouTube in Wired Magazine's December issue called "YouTube vs. Boob Tube". The article does a great job of talking about the issues involved with "New Media" companies like YouTube in regards to advertising money.

What the article does not really cover is why, the root cause. Why is media changing?

Simply put, traditional media is changing because it did a poor job of servicing customers and it is no longer able to keep alternatives away from consumers.

Increasing changes in the advertising industry are a further sign of the Internet's growing maturation and the ripple effects caused by Google.

These two articles are an indication that the Internet is becoming an advertising channel in its own right that can compete admirably with the tried and true venues of print and television. Not only is the Internet where the kids are but it is also much more measurable than those other mediums. The data angle was Google's insight and it continues to shake things up, albeit at a slow, steady pace.

To face the changing demands of customers, advertising companies are having to justify prices with data not just reputation. As a result, more and more small firms are getting big contracts.

About two months ago, I purchased a new laptop from Apple. Since I wanted more memory than their default, I could not just get one from the store so I had to order it online. Slightly delayed gratification.

Although trivial on some levels, the overall fulfillment experience totally amazed me. I got a new system, configured for me to my specifications, built and shipped from China! which arrived at my house only days after my order.

Most people probably take an experience like this for granted but as someone who has worked in manufacturing and studied the concepts of "built to order" production systems, the logistics involved here are simple amazing. My laptop from China got her faster than the software in the same order which came from California and from the East Coast.

This one small example shows that the global economy really is surging ahead into new areas for humankind.

In theory, the price a merchant should charge is the price that you are willing to pay. If you are willing to pay more than someone else, the merchant would make more profit.

In practice, merchants (in the US) set a price and charge everyone the same (since we dont negotiate most purchases). This type of pricing is easy to do but leaves an "economic surplus" on the table, unrealized.

Another way the information revolution is changing commerce is that it is allowing merchants to start capturing some of that surplus. Using information, online merchants are starting to focus on how they can offer everyone an individually tailored price/offer. This is an amazing change even though the consumer is not generally aware that it is happening.

Have you heard of eBay Express? What about Half.com? If not, you arent alone.

I have seen a lot of those goofy commercials for eBay on TV but I havent seen anything about Express or Half. While Half.com has been around for years, it never seemed to garner much attention. eBay Express is new this year and it too seems largely unknown although it is an emphasis of the company.

I think eBay is a victim of its own success in somwe ways. There is so much stuff there, the experience is overwhelming for many people and that creates a major barrier to entry for new customers.

One way to address this problem is by brand extension - create new companies that slice of pieces of the eBay pie and privide a specialized service that is more targeted and easier to use. Hence Half and Express. I totally think that is the right way to go for eBay but it is proving slow if not difficult for them.

I studied software development in college and then spent a number of years building software products in different industries. I generally worked as a developer or project manager and my jobs have caused me to interact with people from just about every department in a normal company, including marketing, management, executives, HR, accounting, UI and QA.

Over the years, I have thought about the process of building better products and why there are so many failures and so few successes. My feeling is that the number one problem with software is not bugs; it is ease of use. Bugs can be quantified and fixed but products that are hard to use are not broken, they are built that way to begin with.

The root cause of this problem is threefold: the nature of design, the process and the people at most development companies.

This topic is really interesting because a) I like wine and b) it illustrates how reality is often very different from the way we like to view ourselves.

In the USA, we love to tell everyone about our "free market" and how the "free" market will improve everyone's lives and how every other country should be just like us and our "free" market. The reality however is that our markets are far from free - there are government restrictions as well as government favoritism, like farm subsidies for corn and no-bid contracts for Iraq.

One thing I see over and over again is how the business view differs from the consumer view or experience. You assume things work one way when in reality they dont. Case in point: movie revenue.

Check out this graph. Do movies make money from actually showing the movie in theaters or do they make money from non-movie stuff like toys? Who'd of thunk that the movie biz is really the toy biz.

As someone who loves to talk about organizational systems and cultures, Google is a really interesting company. I might go so far as to say Google is a sociological experiment in trying to create a company of self-managed developers. An entrepreneurial company without management overhead. Something that most people would say cannot sustain existance.

It seems impossible but in my brief exposure to Google, I have to admit that I was impressed. They are something different.

But they are also successful and growing. Growth has killed a lot of golden geese at other companies. Can Google maintain their culture and continue to grow? This is a really interesting article about Google's hiring process, one that is every bit as eccentric as Microsoft's.

A common misconception about entrepreneurship is that you have to come up with some crazy new idea. The reality is that there is money to be made by taking an existing business and improving it. Take Carmax for example.

Netflix has a terrific product. Sadly, even with a terrific product you cannot rest for very long.

For the past year, I have been hearing reports about a) the insane number of people watching YouTube and b) the insane cost of running YouTube (specifically the cost of bandwidth).

About a week ago, I started to see articles about a possible purchase of YouTube by Google.

Yesterday, the articles confirming the purchase began (including a video of the two slacker founders on YT).

Now there is a wave of articles by and about the people who didn't buy YouTube telling everyone who will listen why it was stupid to purchase YouTube.

Hmmm...

Who needs prime-time TV dramas! If you watched 60 Minutes last night, you got to see a real life drama that is as exciting as any TV show.

The steamy story is non other than HP and the behavior of board members Perkins and Keyworth, the two guys behind the press "leaks" we have heard about and behind the removal of Carly Fiorina and Patricia Dunn.

So much for the HP way. Taken together, these stories show nothing but big company politics at its finest, most immature and personal levels. Which is to say the story is both unbelievable and totally convincing in the way personal dramas of the rich and famous often are.

If you had any doubts, sex can indeed sell anything - even hamburgers.

It is interesting to see how a product most of us grew up with is being marketed to a new (and unsuspecting) audience in China. No scary clowns in this advert of "trendy" bodies.

Last Friday I attended another NWEN breakfast. As usual, there were three speakers from local companies, including two 5-minute presentations and one main speaker. I enjoyed their stories and have been thinking about their comments.

Venture Breakfast - July 2006

Topic: Building a Lean, Clean, Web 2.0 News Machine

Speaker: Mike Davidson, CEO of Newsvine

Google proved that there is a lot of money to be made from improving the effectiveness (and measurability of) Internet advertising. Ever the imitator, Microsoft has now embarked on a "fundamental shift in strategy" to claim some of those dollars for itself.

As a consumer, we are all accustomed to advertisments but probably never think about how hard it is to measure the effectiveness of advertising. As a business, you want to pay for results which means you want to know which ads work, who they work on, and why. But this information is surprisingly difficult to get.

Measuring advertising is where Google is making its money and there are a number of other companies that are trying to address this problem. I have said before that I thoguht Tivo could have become such a measurement data company but this article covers some of the companies that are trying to solve this problem, some of which are pretty far-out there.

Is this the marketing version of the reality show? It is definitely an example of how people arent always as rich as they seem, although it sounds pretty good to be Nico Bossi. Why dont my parents own a cruise ship line?

The information revolution is well underway. At some times, it feels like the revolution came and went already along with the easy money in the 1990's. Other times, it feels like the process has just begun.

I have been looking at some companies recently and thinking about this information age. It strikes me that the past 20 or 30 years have been a process of getting computers physically installed in every business and every market. We started with 'big iron' mainframes, then the personal computer revolution with a computer on every desktop, and now we have portable computers like Blackberry's so that we can carry our computer everywhere.

But that was just the first wave of the revolution.

One of the surprising things I learned in business school was the value of ideas. Like a lot of people, I went in thinking that the key to startup fortunes was a good idea and I learned that this was wrong.

Ideas are cheap. Many people have similar ideas. The real key is execution. Very few people have what it takes to execute on a good idea.

Today I read a WSJ article on one of my ideas (at least very similar) which is being executed quite well by others :)

Game companies are not known for marketing prowess but once again, game technology leads the way. By collecting real-time data on the type of hardware people have as well as how they play the game itself, companies using this data can build much better products because those products will be very closely tied to their customer's needs. (Valve has already had surveys of hardware with their Steam platform, even making the results available immediately to respondents, but this is the first time I have seen a product that measures gameplay too.)

There is a lot of power (and value) in data about actual customers and actual customer behavior. This is exactly the kind of thing I thought Tivo would exploit in the television advertising realm to go after the soft-underbelly of Nielson. Oh well.

Have I already mentioned that I hate the Apprentice? No? Well I watched the first season and I hate the Apprentice.

I have been hesitant to admit this because so many people love the show. The undergrad entrepreneurship program at UW even does their own mock-Apprentice. But even so, I dislike the show. Why?

The Apprentice may be good TV but it is bad business.

In marketing class today we discussed a case on Red Bull and guerilla marketing. It was a good discussion and I kept thinking about two things: 1) the social pressure to conform and 2) the human desire to learn.

In talking about his company, Zillow, Rich Barton used the term "consumer intelligence". This is intelligence in the sense of information not the sense of IQ. I liked the things Rich had to say and it caused me to think more about this information age we live in.

It is called "consumer surplus" and its foolish for companies to give it away. Companies wanting to maximize profits should set prices to match demand. They should NOT cut prices until demand falls because that means giving away potential profits. It has also been noted that trying to compete on price only drives the prices (and profits) down.

Even though this behavior is bad for companies, they seem to be dong it. Is this stupidity or does it reflect a change, ie compression, of the business cycle where technology products cut prices so fast its hard to recoup the investment?

On the good side, I hope that the existence of more flat-panel TV's puts market pressure on TV broadcasters to improve the HDTV offerings.