Too Busy To Blog?

"They told me how busy they were, and how they had no time and no inclination to mess around with blogs (whatever they were). Out of two classes of 50-60 participants each, I got fewer than 15 total blog URLs."

--Harvard Professor Andrew McAfee

In his blog, Professor McAfee is reporting on the reaction of his students (owners and presidents of companies enrolled in a Harvard executive education program) to his assignment to create a blog. As the quote above says, the reason more did not complete the asssignment is because they thought it was too big a distraction. The reason he gave the assignment in fact was to show how easy ("trivial") setting up a blog is -- a point, Professor McAfee says, some of the "smart students" got.

I would suggest that setting up the blog isn't what's hard. What's hard is making a blog that has value to readers. For many execs, maintaining a blog is just too much work. As an "information product," the "cost to serve" may be too high to be profitable. A physical analogy is when an online luggage vendor like eBags.com goes into the shoe business. With shoes, there's a lot of customization required (a higher cost to serve), which defeats the efficiencies implied by online marketing. I talked about this in a previous post.

As the information content of online offerings grows, these offerings tend to become more highly differentiated, and more expensive to support. Blogs are the perfect example. Executives are indeed smart to take into account the total cost of a venture, not just the startup costs. And a lot of those costs are measured in the mental resources of the company's key executives.

Express the Buyer's Nonsense

"Sales and marketing people put a ton of effort into providing the "rational justification" for a buying, joining, whatever-it-is decision … Your passionate users don't need you to help justify the product, they need you to help them justify the passion."

--Kathy Sierra

Kathy's right. We marketing types do like to go on and on about features and benefits. That's why a lot of high-tech marketing comes off as generic.

As I've said in this blog before, business buyers are consumers too. When I said that, I was commenting on a Boston Consulting Group article, "Thriving in a World of Consumer Control." The BCG point -- that media companies selling to consumers need to apply consumer market segmentation strategies. These are strategies that "pull" consumers with highly differentiated offerings rather than try to "push" generic technology. My point -- that business buyers also require differentiated treatment.

BCG says to map your offering against what the customer needs. Kathy says to map your offering against what gets the customer excited. That's classic MTV style, MySpace style, Apple style consumer marketing — which helps explain why these media companies outperform their peers. The technology doesn't just make sense -- it expresses the buyer's nonsense -- which makes perfect marketing sense.

A Bright Future for Text

"At Microsoft, e-mail is the medium of choice, more than phone calls, documents, blogs, bulletin boards, or even meetings …"

--Bill Gates

When I meet with clients to go over copy points for a new white paper, web page, or other writing project, I'm still amazed when someone says to keep it short. After all, no one reads the text anyway (advice usually followed by an apology to the writer in the room). Information overload, rich media, and just the general busyness of everyday life have put a premium on the time spent actually reading text.

These are often the same people who would rather rely on text for doing day-to-day work. They avoid face-to-face meetings in favor of emails, written answers to interviews, and -- yes -- texting. Text lets them suck in information faster than a live meeting or a phone call would. People read faster than they listen, and text is organized (to some degree anyway) for greater impact versus freeform conversation.

There's been more text about text recently since Bill Gates published a Fortune article about his work process -- in which he said Microsoft's preferred mode of employee interaction is email. Several bloggers have responded, including Brent Edwards who makes a good point when he writes today that people only get a fraction of what they hear and even less of what they read.

That's why I like to digitally record my interviews for writing projects. When you listen afterwards, you can hear where people routinely talk "past" each other without even realizing it. Email is even harder. You can spend an hour writing a few sentences in an email just so what you say won't be misinterpreted on the receiving end. What might go over perfectly well in a face-to-face conversation (within the context of body language) can really set someone off in an email.

I think text versus no text is a false issue. I think what matters is the level of craft employed either way. In the right hands, any form of communication can be both powerful and efficient.

Consolidation Pushes Innovation in ERP

CEOs are demanding data that gives them an end-to-end view of the enterprise — that is, data integrated from multiple, fragmented sources.

--Booz Allen Hamilton

Booze Allen Hamilton authors Mitch Rosenbleeth, Corrie DeCamp, and Stephen Chen report on the effects of ERP market consolidation in their recent article, "The Coming Software Shakeup." With only two major players left standing -- Oracle and SAP -- a major impact of consolidation will be higher prices, the authors say. Higher prices in turn will lead to more companies getting their ERP by subscription over the web as a pay-per-use service. More and more, buyers will also look beyond increasingly standardized ERP systems for competitive advantage -- which more often will come in the form of what used to be called decision support.

My own feeling is that consolidation will push innovation. Web-based ERP is a more efficient vehicle with which to deploy innovative features, including the data-centric end-to-end visibility into the business that the authors discuss. As innovation becomes critical, software buyers will find they simply can't wait while putting up with the internal cultural resistance and long deployment cycles of traditional software implementations.

I do have one question for the authors: What role will business intelligence vendors play in all this? Companies like Hyperion, Cognos, GEAC, and OutlookSoft already claim to provide end-to-end visibility. Look at what OutlookSoft says on its website:

OutlookSoft CPM's web-based architecture allows for zero-footprint, ultra-fast deployment, scalable to the thousands. Integration with your general ledger (GL), ERP, and other source systems is seamless -- including SAP, Oracle, PeopleSoft, and more. And OutlookSoft CPM's patented integration with Microsoft Excel ensures the broadest possible level of corporate adoption, acceptance and usability

Are these companies an example of what Booze Allen Hamilton is talking about when it says that:

… as smaller software companies are swallowed up by larger ones, and as top-tier applications migrate into content-rich information systems, the most innovative survivors will develop new industry-specific niche programs that analyze and transform data in real time so that it can be acted upon.

Does this mean that the future of business intelligence is ERP? Yes? No?

The World’s Most Innovative Companies

"Tracking innovation results is hard. You can't reduce it to a single number."

--Business Week

Business Week and the Boston Consulting Group are out with their annual list of the 100 most innovative companies. Over 1,070 executives from the largest 1,500 global corporations (capitalization in US dollars) returned surveys asking 19 general questions on innovation and an optional eight questions on metrics. To avoid vote stuffing, executives were asked to identify the most innovative company outside their own industry.

Companies were ranked on process, product and business model innovation and the chart also showed companies’ 10-year margin growth and stock return.

Here are some of my thoughts about the report:

Innovation vs. perception. First, the survey does not really show which companies are the most innovative. It shows which companies the surveyed executives perceived to be the most innovative. Few, for example, will argue that Apple (number 1 on the list) is not a great innovator. But it is also a great marketer. By marketing innovation as a product in its own right, Apple gets a much bigger bang for its innovation buck. One could also question whether Microsoft deserves to be number 5 on the list. The company makes most of its money on ideas copied from others. It has not released a new version of Windows in five years and its Google strategy is still a work in progress. I suspect that there is some cognitive dissonance going on. How can a company be this successful and not be a great innovator? Good question.

Time of innovation. Many of the companies on the list haven’t come up with anything really big lately. Wall-Mart’s biggest ideas for 2005 were testing an up-market store in Texas, launching a PR offensive, and moving into urban areas (so, where else is left?). Or what about Dell? Yes, they dropped to 14 from number 6 on the list. But what big innovation has Dell come up with in the last several years? The really big innovators for 2006 may be the ones we hear about in 2008, or later.

Clarity of innovation. One of the things the survey makes clear (and the reason for the eight optional survey questions) is that innovation is very hard to measure. Financial results (again, Apple is a good example) are not a reliable indicator — and they are very much a lagging indicator at best. If you can’t quantify innovation, how do you quantify a return on innovation? Things get even murkier if you try to draw a fine line between innovations that are “just more of the same only much better” and innovations that make previous solutions obsolete.

A Vicious Sales Cycle

Like you, I keep reading that these are fat times for the economy. Organizations know they can't cut past zero, so they are spending again to grow.

So why hasn't selling IT suddenly become a cakewalk? At various times in this blog I have reported analyst expectations of low single digit growth in IT spending overall. Exceptions will be technologies where the link to competitive advantage is blindlingly obvious.

I had a conversation about this with one of my clients this morning — in fact, a vice president of sales at a technology vendor. He made a couple of points I thought worth passing along.

1) Decision makers who have under-invested in technology in the past are too busy in the present to invest in technology. It's a viscious cycle. If you are using (for example) Excel for budgeting and consolidations you may simply not have time in your day to think about (let alone manage) buying and integrating a first class financial reporting and analysis system.

2) IT is not as good at selling to CEOs as marketing or sales types are. It's natural that companies that are suddenly focused on revenue growth would invest in marketing and sales. However, it's also true that IT suffers a comparative disadvantage versus marketing and sales in the competition for corporate funds. If selling is what you do anyway, then selling to your own CEO is easy. Again, it's a viscious cycle. The less investment in IT, the less relevant IT becomes, and the harder it is for IT to make a business case.

Until we break out of this, IT will stay hungry even when everyone else is getting fat.

Sell Deployments Not Products

"Businesses are focusing a greater share of their IT investment on leveraging emerging technologies to create competitive advantage . . . "

--DiamondCluster

Here's an interesting irony. While companies are spending less on innovation projects, they are spending more on emerging technologies that create innovation. The first finding is from a 2004 Harris Research reported cited by A.T. Kearney -- stating that companies spent 20% of IT budgets on innovation projects in 2004 versus 30% two years earlier.

The second is from a Forrester report cited by DiamondCluster in its white paper titled "How Should CTOs Lead Technology Innovation?" by Chris Curran, DiamondCluser's CTO. Companies allocated 18% of their technology spend on emerging technologies in 2005 versus 15% in 2003, according to Forrester.

Less on innovation projects but more on innovative technologies. Hmm.

I think the key to understanding this disconnect is the percentages. In absolute terms, technology acquisition costs are much less than the project costs into which they roll up. So companies' IT staffs can be spending more to check out the new stuff but not getting a proportionate buy-in from business managers who still hesitate to fully deploy these emerging technologies.

Chris Curran draws the conclusion from the Forrester findings that companies are looking more toward innovative technologies to drive competitive advantage. That may not be true, given the Harris study. On the other hand, the A.T. Kearney conclusion that the lower project spend points to an IT credibility issue may not be completely correct either. There may be some process issues here too -- like the CTO's inability to manage technology life cycles.

Chris discusses some of these issues in his paper. IT marketers might want to help their enterprise customers manage those issues so as to turn more product buys into deployments.

Class Trips

Sorry -- no blogging last week. We were on vacation in Vienna and Salzburg (for Mozart's 250th birthday) and there just wasn't time. (See the photos here.)

Speaking of class trips, while away I thought more about Geoffrey Moore's "Best In Class Is a Sucker Bet" post. I think what bothers me is the use of the word "sucker." I completely get the problem of being the class leader in a class that's about to be rendered obsolete by a class killer. In fact, I would say if you are "beyond the class" you had better be killer.

Jeff's point is that class leadership is always a bad goal as an investment strategy. But a goal is not a strategy. Dell is class leading because it can set the benchmark price for commodity PCs. Setting the benchmark price is an objective. Process innovation is a strategy. The test is not whether the goal is high enough. (Does it matter if Google's founders aspired to reshape the web?) Everyone wants sustainable competitve advantage -- the bigger and more sustainable the better. Having a goal isn't hard. What's hard is strategy, tactics, and ability to execute -- and, yes, picking the right objectives.

But what about companies that aren't killers? Should we call investors and managers in those companies suckers? Maybe they just do it better, faster, cheaper -- and with less risk -- than companies who settle for nothing less than the Next Big Thing. Maybe the suckers just work harder; mine a more lucrative niche, have more experience; take more pride in their work. And as a result maybe they charge more, have premium brand equity, and have access to customers and resources that competitors lack. Maybe they have a more innate sense of what customers want; or maybe they're just lucky.