You Don't Know What You Don't Know

“Sometimes strategic risks are so pervasive, they are overlooked as risks.”

--Mike Delurey, Booz Allen Hamilton

Do you want to know how Booz Allen Hamilton defines "strategic risk"? According to the consulting firm the characteristics of strategic risk include:

• Complexity
• Potential to impact multiple business units
• Potential to affect short-and long-term value

That's according to an article now appearing in "News & Ideas" section of its website titled: "Simulation Demonstrates that an Integrated Perspective is Important to Social Risk Management." It's about a simulation Booz Allen Hamilton conducted with Harvard's Kennedy School of Government of what happens when a company faces major public protests against its activities.

Among the findings: that social risk is not just a PR problem, but fits this definition of strategic risk and should be treated that way. Furthermore, one of the things that makes social risk risky is that it will be not be recognized for what it is. If you connect the dots, that's what makes strategic risk risky as as well — that you don't know what you don't know (YDNKWYDK).

In fact, YDNKWYDK seems to me to be one of the most general risks of all — and potentially an area of research that could bear all kinds of fruit — and in areas far a field of corporate social responsibility. It's already a focus where computational linguistics meets search.

If you don't know what you don't know, what do you type into Google? My client, Basis Technology, makes a product that bolts onto a search engine that lets you enter words like "person" or "date" to retrieve instances of those classes regardless of spelling or punctuation. It's a practical metaphor for the bigger issue of how to get answers to questions you don't know enough to ask in the first place.

YDNKWYDK also speaks volumes about innovation. For one thing it tends to preclude absolute assertions. Take for example Geoffrey Moore's comment a couple of months ago that trying to be the best at something makes you a sucker. I agree with Brent Edwards who said in his blog, Innovation Science" that: "Like most rigid declarations, in some cases Moore’s theory holds and and in some cases it doesn’t."

Or take Harvard Business School professor Andrew McAfee's comment that there are no recent tech breakthroughs that make SOA more achievable.

In each case, the absolute assertion kills the discussion (and by extension innovation) because there's no room for YDNKWYDK. That's taking a really big risk.

SOA Is Achievable

"Even SOA proponents agree that there's no recent tech breakthroughs that make it a more achievable vision now than it was before . . . "

-- Professor Andrew McAfee

One of the great opportunities I have in my work is having a front row seat on some of the really great technologies as they burst on the scene. I think that is definitely the case with my client GigaSpaces. They have this amazing technology that a lot of Wall Street firms are adopting (but don't want to talk about) that allows them to dynamically scale legacy middleware-based multi-tier environments -- essentially creating SOAs without all the rules and point-to-point connections that most SOA discussions envision.

One of those discussions is taking place right now big time in blogland. A key participant is Harvard's Andrew McAfee who says that SOAs are really just another name for distributed computing, object oriented programming, CORBA, and a bunch of other technologies that have promised plug-and-play software reuse over the years.

Anyway, IMHO I think the whole idea of virtualized deployment may finally make SOA real. Am I missing something here? I'd be interested in hearing from Prof. McAfee or others why things aren't different this time around.

Do Something Amazing!

"Leading is a tough thing to describe or quantify."

--U.S. Representative Jane Lakes Harman

Yesterday, I had the honor of attending my niece's graduation from Smith College -- Phi Beta Kappa and Magna Cum Laude. The family has taken to calling her the "stealth student" because of how she makes no big deal out of her accomplishments. So hearing the commencement speaker hold herself out as an example of success made me wonder if self-described role models make good role models.


That speaker was U.S. Representative Jane Lakes Harman, a leading Congressional expert on terrorism and security issues. You can read her speech here. I'll leave it for you to decide what impact she and her colleagues are having in Congress.

We spend a lot of time in marketing "explaining" success. (White paper anyone?) The thing is, if you are really successful, you don't need to explain it. Other people will gladly do it for you -- if only to compare themselves to role models that work.

If you provide a product or service, and you want to impress a customer -- here's a strategy that will only fail if the customer is someone you are better off not having as a customer in the first place: do something amazing. Do something that is without question truly remarkable. If you really are not a commodity, that should not be a problem.

The strategy also works in reverse. If you are a buyer and you want to test a vendor or service provider — ask them to actually produce something great. Again, if there's value there, they should welcome the challenge.

When you think about it, the go-ahead-impress-me test is itself pretty amazing. No explanations required.

Web-based Professional Services

"Customer-satisfaction numbers don't show a consistent correlation with actual customer behavior"

--Bain

I am interested in learning firsthand whether it's possible to market web-based professional copywriting to new clients. Conventional wisdom says distance no longer matters except for physically dependent services, like surgery or dog walking.

So, is copywriting physically dependent?

Part of any service is the marketing of it. Simply knowing that it is possible to do something virtually doesn't mean a client will let you. Furthermore, clients often behave differently from the way they think they will behave. (See the Bain and Mercer research.)

So lets get down to cases. I created a web-based offering called Copy Protection. For a nominal fee ($199) you can submit marketing documents online for a makeover. People have told me in surveys and directly that this is something they want, and that distance doesn't matter. I have also sold the service successfully to existing clients -- some of whom are very far away.

What do you think? What's the difference between copywriting at a distance versus, say, software development or accounting? The upside is the same -- the client can source talent anywhere in the world.

If you could create your own personal web-based copywriting service, what would you want?

Marketing Versus the Techies

"How can you make the techies happy while still maintaining a good marketing spin … ?"

Recently the Society for Technical Communication asked if they could interview me on the topic of marketing writing for technology companies. This would be for an article in the Society's journal -- and I very much appreciate the opportunity to participate.

The writer sent over his questions -- one of which is quoted above. It is so central to my work that I wanted to address it here.

My answer is that I basically write for two audiences, with a lot of overlap. Those are C-level decision makers and the technologists who support them. The thing that connects those two audiences is strategy. To sit at the table, marketing (not just the marketing writer) must connect the dots between technology and strategy -- the focus of this blog.

If strategy does not connect the technology to the business, or if the seller's strategy is not an extension of the buyer's -- there is no credibility. So, I don't see the built-in tension between the technically savvy and the less technically savvy that the question suggests. If there is tension, that's a sign things aren't working.

To understand strategy, you have to understand how stuff works. If you are selling, say, the business benefits of spaces (i.e., virtually extensible runtimes) then you better know how to explain why they make a better service oriented architecture.

How far left or right you move the slider on the "techie" scale is a matter of professional judgment. And so too is how much you rely on sidebars, journalistic pyramids, graphics, tables and other techniques to elevate technology counterpoints above the business chorus -- or vice versa.

Writing is like any performance. You map form and content against the needs of the audience.

Apple's One Word for Silicon Graphics: Dell

"It's not to say that Apple's products aren't innovative or cool, but … it's very hard for them to swim against [the] tide."

--Michael Dell

Silicon Graphics' bankruptcy this week once again proved to many that you can't fight commoditization with proprietary technology, higher prices, and me-too performance.

I agree with Dave Taylor who says that Silicon Graphics died from "an inability to innovate faster than the industry." What industry? Oh, yes, the high tech industry. So, to restate Dave's point in a slightly different way: You can't be a successful high tech company if you are not high tech.

I also agree with TechDirt who says that when "commoditization is totally inevitable, bucking the trend can be a strong strategy." The evidence: Dell's warning of lower profits and market share gains by HP and Apple.

Dell is less of a high tech company than it used to be. Like SGI's amazing 3D machines, Dell's amazing value chain is not that amazing anymore. Being high tech in the high tech industry doesn't automatically make you rich (just ask Sun), but if you are not high tech in this industry than you are heading for trouble, or an exit strategy.

The Michael Dell quote at the top is from an April 16, 2001 Business Week interview. When asked what future he saw for Apple, Mr. Dell had two words: Silicon Graphics.

Innovation and style notwithstanding. We'll see.

What People Read Here

Three months ago I shared my traffic stats with you for this blog (and that includes my general website). The week of Febrary 5th, I was very excited to have broken the 500 page-view-per-week mark. For the week that ends today, I am at around 1750 -- more than a 300% increase. (Click the graph to enlarge it.)


I think people in general, and marketing types in particular, like to know if other people are looking at the same stuff they are -- and what the trend line is.

I also think it's interesting to see what pages hold people's attention the longest. Here are the top 10 -- as measured by the average time spent viewing that page per week:

1: 4.7 minutes / BCG's Outsourcing Recipe
2: 3.6 minutes / Passive Aggressivie Customers
3: 3.4 minutes / What's Your Process?
4: 2.8 minutes / Writing Your Career
5: 2.7 minutes / What Does Infosys Consulting Think?
5: 2.7 minutes / Be an IT Champion!
5: 2.7 minutes / Why CEOs Don't Buy Enterprise Architecture
5: 2.7 minutes / Booz Allen Hamilton on Virtual Scale
6: 2.2 minutes / Taking Strategy to Market
7: 2.1 minutes / A Recipe for Strategic Vision
8: 2.0 minutes / Today's Cost to Serve Trap
9: 1.9 minutes / When's the Best Time to Fail?
10: 1.8 minutes / Regulation as Opportunity

[A quick update: the final page view tally for the week was 1,868 -- an increase of 123 Saturday after 3:00 p.m. And this is the page people spent the most time watching for the week -- an average 7.7 minutes.]

Thanks for visiting!

BearingPoint's 5 Steps to Innovation Success

"As technology drivers of market discontinuity become less differentiated and have shorter life cycles, the premium will shift to people and process…."

--Michael Lyman, head of Global Management Consulting, BearingPoint

Ask executives what worries them the most and it is probably the idea that they will become obsolete.

When McKinsey & Company asked almost 3,500 global executives what single factor they see as contributng most to the accelerated pace of change. the answer that received the most responses (24%) was: innovation in products, services, and business models. (See "An executive take on the top business trends : A McKinsey Global Survey" in the April 2006 McKinsey Quarterly.)

What would be interesting is to drill down and ask exactly which type of innovation is more compelling: products, services, or business models?

Apparently it makes a difference, according to BearingPoint's Michael Lyman. His commentary in the current issue of the firm's online newsletter lists five steps companies can take — not to innovate per se — but to use innovation to create favorable discontinuities. In other words, to make others obsolete so you don't become obsolete.

And what kinds of innovation have a bigger, longer lasting, and more favorable effect than others? Michael says that technology (i.e., product) is becoming less important and people and process (i.e., business model) more important. For example, technology is becoming easier to copy, but knowledge and structure are not. (His last two steps rely heavily on tight relationships.)

The discontinuity effect of innovation is more important than the innovation itself. And different kinds of innovation present greater opportunities for using that effect. Cool.

Make Way

"Down is not an option."

-- American Dreamz host Martin Tweed when asked where the ratings of his show, the most popular TV program in America, will go from here

You should have seen Boston yesterday. The city was packed. What is it about brilliant sunshine that makes people commute into town on their day off? On Newbury Street, a Ferrari and a Lamborghini were double-parked in front of the Armani Café. The duck boats filled with quacking tourists barely squeezed by. In the Public Garden more than a couple of brides bravely faced down wedding photographers, the chiffon and lace billowing among the apple blossoms.

As usual, over by the park's entrance at Beacon and Charles, Mrs. Mallard and her eight ducklings also waited patiently to have their pictures taken. In several languages, parents coached their kids to wrap their arms around the little bronze statues and look cute.

If you don't know Robert McCloskey children's book, Make Way for Ducklings, it's about a duck family that walks across Boston's Storrow Drive to live in the Back Bay. Maybe not the most rational decision.

(That's Jack in the photo. More photos are here.)

So what gives? Boston traffic is terrible. The waiting lines for seafood are enormous. Practically nothing's on sale. There're no public bathrooms. People make fun of our politicians -- although not so much lately.

Speaking of self-defeating behavior, check out a new McKinsey & Company article titled: "Learning to Let Go: Making Better Exit Decisions." The authors are John T. Horn, Dan P. Lovallo, and S. Patrick Viguerie. It picks up where a previous McKinsey article, "Hidden Flaws in Strategy," leaves off. (See my comment on that article here. McKinsey requires registration.)

Both articles look at the psychology that block executives from changing course in the face of mounting objective evidence they should. Look at both articles if you want to read about all the biases. See also my commentary on an Adventis article, "Innovation by Business Systems." That one proposes a rational system for cutting your losses early.

Two points. First, it doesn't help to only tell people to let go of something they are clearly passionate about. Letting go is not sufficient. Most people will need to find something else to grab onto first. If you really care about getting someone to change their behavior, you need to show them a better behavior.

Second, people who only act rationally (if they could exist at all) could never be successful either at creating a business or innovating one. Creative output comes from the subconscious - the same place a buyer's passion for a product does. The trick is not knowing when to let go -- but when to let yourself go.

It's when they are most in danger that all living creatures become their most passionate, creative, and focused - the very qualities most important for success. That's when "down" (think baby duck feathers on Boston pavement) is not an option.