Technology

On The Everything Store

I recently finished reading The Everything Store – Jeff Bezos and the Age of Amazon – by Brad Stone.

Below are key excerpts from the book that I found particularly insightful:

There is so much stuff that has yet to he invented. There’s so much new that’s going to happen. People don’t have any idea yet how impactful the Internet is going to be and that this is still Day 1 in such a big way.

“If you want to get to the truth about what makes us different, it’s this,” Bezos says, veering into a familiar Jeffism: “We are genuinely customer-centric, we are genuinely long-term oriented and we genuinely like to invent. Most companies are not those things. They are focused on the competitor, rather than the customer. They want to work on things that will pay dividends in two or three years, and if they don’t work in two or three years they will move on to something else. And they prefer to be close-followers rather than inventors, because it’s safer. So if you want to capture the truth about Amazon, that is why we are different. Very few companies have all of those three elements.

So looking back on life’s important junctures was on Bezos’s mind when he came up with what he calls “the regret-minimization framework” to decide the next step to take at this juncture in his career.

We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate direct! to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital. Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.

Jeff Bezos embodied the qualities Sam Walton wrote about. He was constitutionally unwilling to watch Amazon succumb to any kind of institutional torpor, and he generated a nonstop flood of ideas on how to improve the experience of the website, make it more compelling for customers, and keep it one step ahead of rivals.

Bezos was obsessed with the customer experience, and anyone who didn’t have the same single-minded focus or who he felt wasn’t demonstrating a capacity for thinking big bore the brunt of his considerable temper.

“My approach has always been that value trumps everything,” Sinegal continued. “The reason people are prepared to come to our strange places to shop is that we have value. We deliver on that value constantly. There are no annuities in this business.” A decade later and finally preparing to retire, Sinegal remembers that conversation well. “I think Jeff looked at it and thought that was something that would apply to his business as well,” he says.

“I understand what you’re saying, but you are completely wrong,’ he said. “Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. We should be trying to figure out a way for teams to communicate less with each other. not more.”

That was a typical interaction with Jeff. He had this unbelievable ability to be incredibly intelligent about things he had nothing to do with, and he was totally ruthless about communicating it.

If Amazon wanted to stimulate creativity among its developers, it shouldn’t try to guess what kind of services they might want; such guesses would be based on patterns of the past. Instead, it should be creating primitives—the building blocks of computing—and then getting out of the way. In other words, it needed to break its infrastructure down into the smallest, simplest atomic components and allow developers to freely access them with as much flexibility as possible.

‘Jeff does a couple of things better than anyone I’ve ever worked for,” Dalzell says. “He embraces the truth. A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at the time. “The second thing is that he is not tethered by conventional thinking. What is amazing to me is that he is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.”

On a closing note:

Amazon may be the most beguiling company that ever existed. and it is just getting started. It is both missionary and mercenary. and throughout the history of business and other human affairs, that has always been a potent combination. “We don’t have a single big advantage,” he once told an old adversary, publisher Tim O’Reilly, back when they were arguing over Amazon protecting its patented 1-Click ordering method from rivals like Barnes & Noble. “So we have to weave a rope of many small advantages.” Amazon is still weaving that rope. That is its future, to keep weaving and growing, manifesting the constitutional relentlessness of its founder and his vision. And it will continue to expand until either Jeff Bezos exits the scene or no one is left to stand in his way.

A recommended read in the areas of technology and corporate history.

On Don’t Make Think

I recently finished reading Don’t Make Me Think – A Common Sense Approach to Web Usability – by Steve Krug.

Below are key excerpts from the book that I found to be insightful:

But when I’m looking at a page that makes me think, all the thought balloons over my head have question marks in them. When you’re creating a site, your job is to get rid of the question marks.

We don’t read pages. We scan them…We’re usually in a hurry…We know we don’t need to read everything…We’re good at it.

We don’t make optimal choices. We satisfice…We’re usually in a hurry…There’s not much of a penalty for guessing wrong…Weighing options may not improve our chances…Guessing is more fun.

there are five important things you can do to make sure they see—and understand—as much of your site as possible: Create a clear visual hierarchy on each page…Take advantage of conventions…Break pages up into clearly defined areas…Make it obvious what’s clickable…Minimize noise.

If the page is well designed, when your vision clears you should be able to answer these questions without hesitation: What site is this? (Site ID)…What page am I on? (Page name)…What are the major sections of this site? (Sections)…What are my options at this level? (Local navigation)…Where am I in the scheme of things? (“You are here” indicators)…How can I search?

The point is, it’s not productive to ask questions like “Do most people like pulldown menus?” The right kind of question to ask is “Does this pulldown, with these items and this wording in this context on this page create a good experience for most people who are likely to use this site?” And there’s really only one way to answer that kind of question: testing. You have to use the collective skill, experience, creativity, and common sense of the team to build some version of the thing (even a crude version), then watch ordinary people carefully as they try to figure out what it is and how to use it. There’s no substitute for it.

Things that diminish goodwill…Hiding information that I want…Punishing me for not doing things your way…Asking me for information you don’t really need…Shucking and jiving me…Putting sizzle in my way…Your site looks amateurish.

Things that increase goodwill…Know the main things that people want to do on your site and make them obvious and easy…Tell me what I want to know…Save me steps wherever you can…Put effort into it…now what questions I’m likely to have, and answer them…provide me with creature comforts like printer-friendly pages…Make it easy to recover from errors…When in doubt, apologize.

On a closing note:

But the things I’m talking- about here are generally very bad practices, and you shouldn’t be doing any of them unless (a) you really know what you’re doing. (b) you have a darned good reason, and (c) you actually are going to test it when you’re done to make sure you’ve managed to make it work; you’re not just going to intend to test it.

A highly recommended read in the areas of usability and user experience.

 

On The Design of Everyday Things

I recently finished reading The Design of Everyday Things by Don Norman. As Tim Brown – CEO of IDEO best put it in talking about this book: “Part operating manual for designers and part manifesto on the power of designing for people. The Design of Everyday Things is even more relevant today than it was when first published.”

Below are key excerpts from the book that I found to be particularly insightful:

Two of the most important characteristics of good design are discoverability and understanding. Discoverability: Is it possible to even figure out what actions are possible and where and how to perform them? Understanding: What does it all mean? How is the product supposed to be used? What do all the different controls and settings mean?

Design is concerned with how things work, how they are controlled, and the nature of the interaction between people and technology. When done well, the results are brilliant, pleasurable products. When done badly, the products are unusable, leading to great frustration and irritation. Or they might be usable, but force us to behave the way the product wishes rather than as we wish.

My work with that committee :hanged my view of design. Today, I realize that design presents a fascinating interplay of technology and psychology that the designers must understand both.

Affordances are the possible interactions between people and the environment. Some affordances are perceivable, others are not. Perceived affordances often act as signifiers, but they can be ambiguous. Signifiers signal things, in particular what actions are possible and how they should be done. Signifiers must be perceivable, else they fail to function.

Emotion is highly underrated. In fact, the emotional system is a powerful information processing system that works in tandem with cognition. Cognition attempts to make sense of the world: emotion assigns value. It is the emotional system that determines whether a situation is safe or threatening, whether something that is happening is good or bad, desirable or not. Cognition provides understanding: emotion provides value judgments. A human without a working emotional system has difficulty making choices. A human without a cognitive system is dysfunctional.

Do not blame people when they fail to use your products properly. Take people’s difficulties as signifiers of where the product can be improved. Eliminate all error messages from electronic or computer systems. Instead, provide help and guidance. Make it possible to correct problems directly from help and guidance messages. Allow people to continue with their task: Don’t impede progress—help make it smooth and continuous. Never make people Start over. Assume that what people have done is partially correct, so if it is inappropriate, provide the guidance that allows them to correct the problem and be on their way. Think positively, for yourself and for the people you interact with.

In an earlier book, Things That Make Us Smart, I argued that it is this combination of technology and people that creates superpowerful beings. Technology does not make us smarter. People do not make technology smart. It is the combination of the two. the person plus the artifact, that is smart. Together, with our tools. we are a powerful combination. On the other hand, if we are suddenly without these external devices, then we don’t do very well. In many ways, we do become less smart.

Given the mismatch between human competencies and technological requirements, errors are inevitable. Therefore, the best designs take that fact as given and seek to minimize the opportunities for errors while also mitigating the consequences. Assume that every possible mishap will happen, so protect against them. Make actions reversible; make errors less costly. Here are key design principles: Put the knowledge required to operate the technology in the world. Don’t require that all the knowledge must be in the head. Allow for efficient operation when people have learned all the requirements. when they are experts who can perform without the knowledge in the world, but make it possible for non-experts to use the knowledge in the world. This will also help experts who need to perform a rare, infrequently performed operation or return to the technology after a prolonged absence. Use the power of natural and artificial constraints: physical, logical. semantic, and cultural. Exploit the power of forcing functions and natural mappings. Bridge the two gulfs, the Gulf of Execution and the Gulf of Evaluation. Make things visible, both for execution and evaluation. On the execution side, provide feedforward information: make the options readily available. On the evaluation side, provide feedback: make the results of each action apparent. Make it possible to determine the system’s status readily, easily, accurately, and in a form consistent with the person’s goals, plans, and expectations.

Designers often start by Questioning the problem given to them: they expand the scope of the problem, diverging to examine all the fundamental issues that underlie it. Then they converge upon a single problem statement. During the solution phase of their studies, they first expand the space of possible solutions, the divergence phase. Finally, they converge upon a proposed solution.

With massive change, a number of fundamental principles stay the same. Human beings have always been social beings. Social interaction and the ability to keep in touch with people across the world, across time, will stay with us. The design principles of this book will not change, for the principles of discoverability, of feedback, and of the power of affordances and signifiers, mapping, and conceptual models will always hold. Even fully autonomous, automatic machines will follow these principles for their interactions. Our technologies may change, but the fundamental principles of interaction are permanent.

A must read for anyone involved in designing products!

 

 

On Leading Digital

I recently finished reading Leading Digital – Turning Technology Into Business Transformation – by George Westerman, Didier Bonnet, and Andrew McAfee. This book was graciously offered to me by Capgemini during the recent CIO Perspectives event in Houston. As the title and introduction summarize the core of this book is: “Our most fundamental conclusion is that Digital Masters— companies that use digital technologies to drive significantly higher levels of profit, productivity, and performance—do exist, but they’re rare. For reasons that we’ll explain here, most firms fall short of digital mastery. That’s the bad news, and it’s why we believe you’re probably not ready to survive and thrive in the second machine age.  Here’s the good news: the reasons that companies fall short of digital mastery aren’t mysterious or too numerous to list. In fact, the reasons are pretty easy to categorize. Companies that struggle with becoming truly digital fail to develop digital capabilities to work differently and the leadership capabilities required to set a vision and execute on it. The firms that excel at both digital and leadership capabilities are Digital Masters.”

Below are key excerpts from the book that I found particularly insightful:

Digital Masters excel in two critical dimensions: the what of technology (which we call digital capabilities) and the how of leading change (which we call leadership capabilities). These are two very distinct dimensions of digital mastery, and each plays its own role. What you invest in matters, to a point. How you use those investments to transform your company is a key to success. Neither dimension is enough on its own. Each is associated with different types of financial performance, and each provides only partial advantage. Taken together, they combine to give Digital Masters a clear advantage over their competitors.

On Creating a Compellinq Customer Experience:

Put customer experience at the heart of your digital transformation.  Design your customer experience from the outside in. Increase reach and customer engagement, where it matters, through new digital channels. Make data and analytics the lifeblood of your customer experience reinvention. Seamlessly mesh your digital and physical experience in new ways. Keep on innovating—it’s never over. Every digital improvement in customer experience will open up new possibilities.

On Exploiting the Power of Core Operations:

Free yourself from old assumptions of the predigital age. Look for bottlenecks and inefficiencies in your processes, and consider whether new digital technologies can help you rethink your operations. Consider how each of the six levers may help you improve operations. If you can’t address both sides of a paradox at once, start with standardization or control. This may open up possibilities to address other levers. Consider examples from inside and outside your industry. As with customer experience, a strong digital platform is essential for operational transformation.

On Reinventing Business Models:

Constantly challenge your business model with your top team. Monitor the symptoms that drive business model change in your industry—for example, commoditization, new entrants, and technology substitution. Consider how you might transform your industry before others do it. Consider whether it is time to replace products and services with newer versions if your present offerings are under digital threats. Consider creating brand-new digital businesses using your core skills and assets. Consider reconfiguring your delivery model by connecting your products, services, and data in innovative ways to create extra value. Consider reinforcing your presence in your current market by rethinking your value proposition to meet new needs. Experiment and iterate your new business model ideas.

On Crafting Your Digital Vision:

Familiarize yourself with new digital practices that can be an opportunity or a threat to your industry and company. Identify bottlenecks or headaches—in your company and in your customers—that resulted from the limits of old technologies, and consider how you might resolve these problems digitally. Consider which of your strategic assets will remain valuable in the digital era.

On Engaging the Organization at Scale:

Lead the engagement effort to energize your employees to make the digital vision a reality. Use digital technology to engage employees at scale. Connect the organization to give a voice to your employees. Open up the conversations to give everyone a role in digital transformation. Crowdsource your employees to co-create solutions, and accelerate buy-in. Deal with the digital divide by raising the digital IQ of the company. Deal with resistance by being transparent and open about the goals.

On Governing the Transformation:

Look internally (e.g., IT, finance, HR, and capital budgeting) for effective governance practices. Consider which digital decisions must be governed at the highest levels of the company, and which can be delegated to lower levels. Place somebody in charge of leading digital transformation, whether that is a chief digital officer or another leader. Identify governance mechanisms, such as committees and liaisons, to assist in governance. Examine whether you need a shared digital unit, including the resources it would have and the roles it would play. Adjust your governance models as your company’s governance needs change.

On Building Technology Leadership Capabilities:

Assess the state of your IT-business relationships: consider trust, shared understanding, and seamless partnership. Assess your IT unit’s ability to meet the skill and speed requirements of the digital economy. Consider dual-speed IT approaches such as a unit within a unit or a separate digital unit that combines IT, business, and other roles. Focus your initial investments on getting a clean, well-structured digital platform; it’s the foundation for everything else. start building the right digital skills. Challenge yourself continually to find new things you can do with your IT-business relationships, digital skills, and digital platform.

In conclusion:

Our research has shown that Digital Masters enjoy superior performance, which should be reason enough to get leadership teams interested in the concepts presented in this book. But there’s also another, even more fundamental, reason: when it comes to the impact of digital technologies on the business world, we ain’t seen nothin yet. The innovations we’ve discussed in previous chapters, including social networks, mobile devices, analytics, smart sensors, and cloud computing, are certainly powerful and profound. They’re reshaping customer experiences, operations, and business models. The pace and impact of these innovations have been nothing short of astonishing, but they’re just a prelude for what’s to come. Technology’s role as the endless agitator of the business world will not only continue, but will accelerate—exponentially.

A recommended read in the IT strategy space.

On Confessions Of A Successful CIO

This week, I have the pleasure to review Confessions Of A Successful CIO – How the Best CIOs Tackle Their Toughest Business Challenges, the latest work by my colleagues Dan Roberts and Brian P. Watson. Dan first told me about this book on an earlier call in March, and since then I was intrigued and looking forward to reading it and hearing about the stories to be shared within it.

This book retells the stories of nine exceptional CIOs as they navigated their organizations through business transformations. While the story of each CIO varied, five common themes did emerge:

Bet the farm. These leaders are not afraid to take on the big risks. They’re not afraid to pitch the big ideas, because they know they can speak the language and justify the investment.

Answer the call. These leaders stepped up when they were called to action—oftentimes to help save their companies’ futures. This requires a confidence in their abilities, and in their own experiences, that not every leader has.

People come first. These leaders understand the value their people bring to their organization. They don’t treat them like a number or an interchangeable part.

Decisiveness makes all the difference. Despite their human side, these leaders understand that they need to make tough decisions that affect not only their people but also their company’s health.

Results matter. These leaders don’t do pie-in-the-sky research and development or implement the latest bright, shiny objects without knowing the business case and the long-term business value. They’re more focused on enabling and improving the business and on driving the all-important metrics that do that.

Here are some key lessons that I wanted to share from the CIO passages:

THE ANTICIPATOR: FILIPPO PASSERINl

On turning bad situations into opportunities:

He turned a bad situation into a positive one, and now he drills that ethic into the heads of everyone in his GBS organization. “It’s more than fixing the issue. It’s not about playing an even game. If you are 1-0, to use soccer language, it’s not only about how to get to 1-1, but how can you win the game?” Passerini said. “When we have an issue, we always think not just how to fix it, but how to turn a negative perception of a system problem or change management into a success story. This is another element, from a cultural standpoint, that is so critical.”

On transparency:

“Tough love is important. I learned it’s so crucial to give people full transparency about what is happening,” Passerini said. “There is always a dilemma about how much you tell employees when you have a new idea, early on, because it may generate more questions and concerns than benefits. We have come to the conclusion that we share everything immediately … things may not always materialize, but we want our people to know that if it doesn’t work, we will change again and do something different.”

Three inquisitive questions to ask before undertaking a major initiative:

Passerini—adapting guidelines Lafley established for P&G executives in his “playing to win” philosophy—asks three major questions of his team before undertaking a major initiative. The first is, what right does the organization have to win?…The second is, what needs to happen for the initiative to generate that business value?…The third is the most important: What can go wrong?

On the importance of humility:

To Passerini, relevance needs to come with a certain degree of humility. He emphasizes to his team to not act like know-it-all, but to also have the confidence to accept more responsibility and the self-assurance to propose innovative ideas to the business.

THE ROCKET SCIENTIST: REBECCA RHOADS 

On the importance of alignment:

“We started with the commitment around company-wide common processes,” Rhoads said. “Rather than going out into the company as an IT function and selling it as the IT solution, we were all aligned from a business perspective first. That allowed the IT organization to partner with every function and every aspect—all of which were also going through transformation.” All of this was taking place with the very active sponsorship of CEO Swanson, she explained. The vision was to build a business model that was not only immediately rewarding but also enduring. The vision was to take the long view.

On the importance of embracing a shared vision:

“You need to have a team that shares your vision. But then the team has to make your vision theirs’ Rhoads said. “And when they make your vision their vision, now you’re off and running. If that’s not happening, then the change isn’t happening.” Still, when Rhoads was asked if the change management or culture clash was akin to a wall, she paused—but what she said next neatly embodies her leadership style and her way of viewing challenges. “I’m not sure it always looked like a wall,” she said. “Maybe that’s it—I just don’t see it that way, so I don’t approach it that way.”

On the importance of maintaining self-confidence during the journey:

The people who put you in that job had all the confidence in the world in you. They’re asking you to take on a lot,” Rhoads said. “Maybe they’re stretching you in the role, but they’re not losing confidence, and you just have to recognize that it’s going to be difficult, it’s going to be messy—the stuff in the foxhole is not what you expected. But the last thing you need to do is start to get weak-kneed and lose confidence in your ability.”

THE FIXER: STEVE BANDROWCZAK 

On the struggle against mediocrity and the fight for mastery:

And he reasserts his intolerance for mediocrity every chance he gets. Every day he tells his team they need to be better than their competitors. If they stack themselves up against the competition—in everything from quoting cycle times to receivables to capital returns—and see that they’re lacking, as Bandrowczak says, a change opportunity presents itself. And if they can master those areas and beat the other industry players, his team gets better by default.

On the delivery trifecta:

Bandrowczak also takes issue with CIOs and business leaders griping about the difficulties in prioritizing key projects. For him, it comes back to a few simple elements: the right portfolio, the right staff, and the right resources. If you don’t have those things—or can’t figure out how to understand them or access them—you’re in trouble.

THE CONDUCTOR: LYNDEN TENNISON

On strategies for combating team fatigue during multi-year initiatives:

After tackling the fear and uncertainty existing in the legacy team. Tennison also had to watch another potential issue: fatigue. Every veteran IT professional knows the stress and exhaustion that comes with working on multiyear, multiphase projects. You’ll see progress, but after a while, it just feels like running on a treadmill. So Tennison focused on two remedies. The first was a time-tested management tactic. He rotated people—including his direct reports— in and out of different positions, both inside the IT organization and out. “We gave them some new air to breathe,” he said. The second went to his core strategy for Net Control—and one that many CIOs play very differently. Tennison kept the team focused on the discrete deliverables they mapped for the fill project, not on one big-bang initiative.

THE DECIDER: WAYNE SHURTS

On the importance of learning from failure:

Right after the sales project went south, Shurts began taking stock of what went wrong. And that was one of the first and most important lessons he learned. Instead of focusing on what’s right in your plan, Shurts said, you have to be “relentless” in determining what’s wrong, and what might not work. Things will go wrong on any project—the key is to pay close attention to detail and understand that the plan you put on paper will likely be different than what’s really going to work in the field.

On the constant need for validating commercial sponsorship of projects:

Superfusion had devolved into just an IT project—not a business transformation initiative. There were chronic delays with no end in sight. Few thought it would work…In his second week as CIO, Shurts went around the room, asking the company’s senior leaders why they were still doing Superfusion. No one could give him a credible answer. In his sixth week, he pulled the plug.

On the dangers of aiming for perfection:

“Rather than designing for the rule and accommodating the exception, they were designing everything to be perfect, perfect. perfect,” he said. “So we came out and said, ‘Something better today— especially at Supervalu—was worth far more than something perfect a year from now.'”

THE REALIST: DON IMHOLZ

Guidance on outsourcing:

“The right way to do it is first, strategy, then financial analysis, and then pick your partner. If you do that, I think things will work fine,” Imholz said. “I’m not all-in one way or the other—I’m not all-in saying everything should be inside, or that you should outsource the majority of it.” Regardless, companies will continue to face challenges. And they’ll make mistakes. One of the biggest mistakes Imholz sees companies make is “to try to outsource a problem”—in other words, farming out an under-performing element of the IT operation. “That’s the wrong way to go about it,” he said. “If you can’t manage something reasonably well, then you’re not going to do terribly well outsourcing it, because management responsibility doesn’t go away.” If you’re going to outsource a problem, Imholz said, fix it first.

THE INNOVATOR: GREG SCHWARTZ

On the need for innovation to be executed to deliver true value:

When he talks to budding CIOs, he gets a lot of questions about innovation. His take: innovation for innovation’s sake doesn’t mean much if the operational discipline isn’t there. It’s all about executing.

On the role of IT as an enabler of The Business Strategy:

Schwartz is emphatic about his organization’s role as an enabler of the business. “IT doesn’t own the strategy—that falls to our business partners,” Schwartz said. “But if you’re an enabler, you can influence and guide and show what’s possible and be effective change agents.”

 

I will conclude this post with the brilliant reminder by Susan Cramm, from the forward of the book:

Leading with technology is, first and foremost, about leadership. While there is no one-size-fits-all road to success, great leaders, like the ones profiled within this book, are marked by a unique set of qualities: passion and drive to make a positive difference, the ability to engage others to chart the future and define the path, and the paradoxical ability to maintain optimism and perseverance through difficult circumstances. With courageous and disciplined leadership as the foundation, the other factor that distinguishes these leaders is a level of technology smarts that is only born from experience. Technology-smart leaders know how to identify fin the words of one of the CIOs profiled here) the “art of the possible” amid the complex assortment of desired outcomes, existing capabilities and complexities, and various resources—technical and organizational—that can be applied to the transformational journey.

A recommended read for any IT leader.

 

On Steve Jobs

I recently finished reading Steve Jobs by Walter Isaacson.

Below are key excerpts from the book that I found particularly insightful:

1- “I always thought of myself as a humanities person as a kid, but I liked electronics,” he said. “Then I read something that one of my heroes, Edwin Land of Polaroid, said about the importance of people who could stand at the intersection of humanities and sciences, and I decided that’s what I wanted to do.” It was as if he were suggesting themes for his biography (and in this instance, at least, the theme turned out to be valid). The creativity that can occur where both the humanities and the sciences combine in one strong personality was the topic that most interested me in my biographies of Franklin and Einstein, and I believe that it will be a key to creating innovative economies in the twenty-first century.”

2- “His wife also did not request restrictions or control, nor did she ask to see in advance what I would publish. In fact she strongly encouraged me to be honest about his failings as well as his strengths. She is one of the smartest and most grounded people I have ever met. “There are parts of his life and personality that are extremely messy. and that’s the truth,” she told me early on. “You shouldn’t whitewash it. He’s good at spin, but he also has a remarkable story, and I’d like to see that it’s all told truthfully” I leave it to the reader to assess whether I have succeeded in this mission. I’m sure there are players in this drama who will remember some of the events differently or think that I sometimes got trapped in Jobs’s distortion field.”

3- “Jobs said that his appreciation for Eichler homes instilled in him a passion for making nicely designed products for the mass market. I Jove it when you can bring really great design and simple capability to something that doesn’t cost much,” he said as he pointed out the clean elegance of the houses. “It was the original vision for Apple. That’s what we tried to do with the first Mac. That’s what we did with the iPod.””

4- “The Blue Box adventure established a template for a partnership that would soon be born. Wozniak would be the gentle wizard coming up with a neat invention that he would have been happy just to give away. and Jobs would figure out how to make it user-friendly, put it together in a package, market it, and make a few bucks.”

5- “Coming back to America was, for me, much more of a cultural shock than going to India. The people in the Indian countryside don’t use their intellect like we do, they use their intuition instead, and their intuition is far more developed than in the rest of the world. Intuition is a very powerful thing, more powerful than intellect, in my opinion. That’s had a big impact on my work.”

6- “Jobs is a complex person, he said, and being manipulative is just the darker facet of the traits that make him successful. Wozniak would never have been that way, but as he points out, he also could never have built Apple. “I would rather let it pass,” he said when I pressed the point. “It’s not something I want to judge Steve by.””

7- “Apple. It was a smart choice. The word instantly signaled friendliness and simplicity. It managed to be both slightly off-beat and as normal as a slice of pie. There was a whiff of counterculture, back-to-nature earthiness to it, yet nothing could be more American. And the two words together—Apple Computer—provided an amusing disjuncture. ”

8- “Jobs’s father had once taught him that a drive for perfection meant caring about the craftsmanship even of the parts unseen. Jobs applied that to the layout of the circuit board inside the Apple II. He rejected the initial design because the lines were not straight enough. This passion for perfection led him to indulge his instinct to control. Most hackers and hobbyists liked to customize, modify, and jack various things into their computers. To Jobs, this was a threat to a seamless end-to-end user experience.”

9- “Markkula would become a father figure to Jobs. Like Jobs’s adoptive father, he would indulge Jobs’s strong will, and like his biological father, he would end up abandoning him. “Markkula was as much a father-son relationship as Steve ever had,” said the venture capitalist Arthur Rock. He began to teach Jobs about marketing and sales. “Mike really took me under his wing,” Jobs recalled. “His values were much aligned with mine. He emphasized that you should never start a company with the goal of getting rich. Your goal should be making something you believe in and making a company that will last.””

10- “Was Jobs’s unfiltered behavior caused by a lack of emotional sensitivity? No. Almost the opposite. He was very emotionally attuned. able to read people and know their psychological strengths and vulnerabilities. He could stun an unsuspecting: victim with an emotional towel-snap, perfectly aimed. He intuitively knew when someone was faking it or truly knew something. This made him masterful at cajoling, stroking, persuading, flattering, and intimidating people.”

11- “But even though Jobs’s style could be demoralizing, it could also be oddly inspiring. It infused Apple employees with an abiding passion to create groundbreaking products and a belief that they could accomplish what seemed impossible.”

12- “The best products, he believed, were “whole widgets” that were designed end-to-end, with the software closely tailored to the hardware and vice versa. This is what would distinguish the Macintosh, which had an operating system that worked only on its own hardware, from the environment that Microsoft was creating, in which its operating system could be used on hardware made by many different companies.”

13- “Their differences in personality and character would lead them to opposite sides of what would become the fundamental divide in the digital age. Jobs was a perfectionist who craved control and indulged in the uncompromising temperament of an artist; he and Apple became the exemplars of a digital strategy that tightly integrated hardware. software, and content into a seamless package. Gates was a smart, calculating, and pragmatic analyst of business and technology; he was )pen to licensing Microsoft’s operating system and software to a variety of manufacturers.”

14- “I’ll always stay connected with Apple. I hope that throughout my life I’ll sort of have the thread of my life and the thread of Apple weave in and out of each other, like a tapestry. There may be a few years when I’m not there, but I’U always come back. If you want to live your life in a creative way, as an artist, you have to not look back too much. You have to be willing to take whatever you’ve done and whoever you were and throw them away. The more the outside world tries to reinforce an image of you, the harder it is to continue to be an artist, which is why a lot of times. artists have to say. “Bye. I have to go now. I’m going crazy and I’m getting out of here.” And they go and hibernate somewhere. Maybe later they re-emerge a little differently.”

15- “Jobs sometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies not because it’s in his interest. he lies because it’s in his nature.” It was in Jobs’s nature to mislead or be secretive when he felt it was warranted. But he also indulged in being brutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the dissembling and the truth-telling were simply different aspects of his Nietzschean attitude that ordinary rules didn’t apply to him.”

16- “For all of his willfulness and insatiable desire to control things. Jobs was indecisive and reticent when he felt unsure about something. He craved perfection, and he was not always good at figuring out how to settle for something less. He did not like to wrestle with complexity or make accommodations. This was true in products, design, and furnishings for the house. It was also true when it came to personal for the house. It was also true when it came to personal commitments. If he knew for sure a course of action was right. he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to think about things that did not perfectly suit him.”

17- “Ever since he left the apple commune, Jobs had defined himself and by extension Apple, as a child of the counterculture. In ads such as “Think Different” and “1984,” he positioned the Apple brand so that it reaffirmed his own rebel streak, even after he became a billionaire, and it allowed other baby boomers and their kids to do the same. “From when I first met him as a young guy, he’s had the greatest of the impact he wants his brand to have on people,” said Clow. Very few other companies or corporate leaders—perhaps none— could have gotten away with the brilliant audacity of associating their brand with Gandhi, Einstein, Picasso, and the Dalai Lama. Jobs was able to encourage people to define themselves as anti-corporate, creative. innovative rebels simply by the computer they used. “Steve created the only lifestyle brand in the tech industry,” Larry Ellison said. “There are cars people are proud to have—Porsche, Ferrari, Prius—because what I drive says something about me. People feel the same way about an Apple product.”

18- “One of his motivating passions was to build a lasting company. At age twelve, when he got a summer job at Hewlett-Packard, he learned that a properly run company could spawn innovation far more than any single creative individual. “I discovered that the best innovation is sometimes the company, the way you organize a company,” he recalled. “The whole notion of how you build a company is fascinating. When I got the chance to come back to Apple, I realized that I would be useless without the company, and that’s why I decided to stay and rebuild it.”

19- “Why do we assume that simple is good? Because with physical products. we have to feel we can dominate them. As you bring order to complexity, you find a way to make the product defer to you. Simplicity isn’t just a -visual style. It’s not just minimalism or the absence of clutter. X involves digging through the depth of the complexity. To be truly simple, you have to go really deep. For example, to have no screws on something, you can end up having a product that is so convoluted and so complex. The better way is to go deeper with the simplicity, to understand everything about it and how it’s manufactured. You have to deeply understand the essence of a product in order to be able to get rid of the parts that are not essential.”

20- “Despite his autocratic nature—he never worshiped at the altar of consensus—Jobs worked hard to foster a culture of collaboration at Apple. Many companies pride themselves on having few meetings. Jobs had many.”

21- “”From the earliest days at Apple, I realized that we thrived when we created intellectual property. If people copied or stole our software, we’d be out of business. If it weren’t protected, there’d be no incentive for us to make new software or product designs. If protection of intellectual property begins to disappear, creative companies will disappear or never get Started. But there’s a simpler reason: It’s wrong to steal. It hurts other people. And it hurts your own character.” He knew, however, that the best way to stop piracy—in fact the only way—was to offer an alternative that was more attractive than the brain-dead services that music companies were concocting.”

22- “But Sony couldn’t. It had pioneered portable music with the Walkman, it had a great record company, and it had a long history of making beautiful consumer devices. It had all of the assets to compete with Jobs’s Strategy of integration of hardware, software, devices, and content sales. Why did it fail? Partly because it was a company, like AOL Time Warner that was organized into divisions (that word itself was ominous) with their own bottom lines; the goal of achieving synergy in such companies by prodding the divisions to work together was usually elusive. Jobs did not organize Apple into semi-autonomous divisions; he closely controlled all of his teams and pushed them to work as one cohesive and flexible company, with one profit-and-loss bottom fine. “We don’t have ‘divisions’ with their own P&L,” said Tim Cook. “We run one P&L for the company.””

23- “Despite being- a denizen of the digital world, or maybe because he knew all too well its isolating potential, Jobs was a strong believer in face-to-face meetings. “There’s a temptation in our networked age to think that ideas can be developed by email and iChat,” he said. “That’s crazy. Creativity comes from spontaneous meetings, from random discussions. You run into someone, you ask what they’re doing, you say ‘Wow,’ and soon you’re cooking up all sorts of ideas.” So he had the Pixar building- designed to promote encounters and unplanned collaborations. “If a building doesn’t encourage that, you’ll lose a lot of innovation and the magic that’s sparked by serendipity,” he said. “So we designed the building to make people get out of their offices and mingle in the central atrium with people they might not otherwise see.””

24- “Jobs insisted that Apple focus on just two or three priorities at a time. “There is no one better at turning off the noise that is going on around him,” Cook said. “That allows him to focus on a few things and say no to many things. Few people are really good at that.” In order to institutionalize the lessons that he and his team were learning. Jobs started an in-house center called Apple University. He hired Joel Podolny, who was dean of the Yale School of Management, to compile a series of case studies analyzing important decisions the company had made, including the switch to the Intel microprocessor and the decision to open the Apple Stores. Top executives spent time teaching the cases to new employees, so that the Apple style of decision making would be embedded in the culture.”

25- “”Steve has a particular way that he wants to run Apple, and it’s the same as it was twenty years ago, which is that Apple is a brilliant innovator of closed systems.” Schmidt later told me. “They don’t want people to be on their platform without permission. The benefits of a closed platform is control. But Google has a specific belief that open is the better approach, because it leads to more options and competition and consumer choice.””

26- “The nasty edge to his personality was not necessary. It hindered him more than it helped him. But it did, at times, serve a purpose. Polite and velvety leaders, who take care to avoid bruising others, are generally not as effective at forcing change. Dozens of the colleagues whom Jobs most abused ended their litany of horror stories by saying that he got them to do things they never dreamed possible. And he created a corporation crammed with A players.”

27- “The saga of Steve Jobs is the Silicon Valley creation myth writ large: launching a start-up in his parents’ garage and building it into the world’s most valuable company. He didn’t invent many things outright. but he was a master at putting together ideas, art, and technology in ways that invented the feature. He designed the Mac after appreciating the power of graphical interfaces in a way that Xerox was unable to do. and he created the iPod after grasping the joy of having a thousand in your pocket in a way that Sony, which had all the assets and heritage, never could accomplish. Some leaders push innovations by being good at the big picture. Others do so by mastering details. Jobs did both, relentlessly. As a result he launched a series of products over three decades that transformed whole industries…”

28- “Was he smart? No, not exceptionally. Instead, he was a genius. His imaginative leaps were instinctive, unexpected, and at times magical. He was, indeed, an example of what the mathematician Mark Kac called a magician genius, someone whose insights come out of the blue and require intuition more than mere mental processing power. Like a pathfinder, he could absorb information, sniff the winds, and sense what lay ahead. Steve Jobs thus became the greatest business executive of our era, the one most certain to be remembered a century from now. History will place him in the pantheon right next to Edison and Ford. More than anyone else of his time, he made products that were completely innovative, combining the power of poetry and processors. With a ferocity that could make working with him as unsettling as it was inspiring, he also built the world’s most creative company. And he was able to infuse into its DNA the design sensibilities, perfectionism, and imagination that make it likely to be, even decades from now. the company that thrives best at the intersection of artistry and technology.”

Regards,

Omar Halabieh

Steve Jobs

Competitive Advantage

I have just finished reading Competitive Advantage – Creating And Sustaining Superior Performance – by Michael E. Porter.

Below are key excerpts from the book that I found particularly insightful:

1- “Both industry attractiveness and competitive position can be shaped by a firm, and this is what makes the choice of competitive strategy both challenging and exciting. While industry attractiveness is partly a reflection of factors over which a firm has little influence, competitive strategy has considerable power to make an industry more competitive strategy has considerable power to make an industry m( or less attractive. At the same time, a firm can clearly improve or erode its position within an industry through its choice of strategy. Competitive strategy, then, not only responds to the environment but also attempts to shape that environment in a firm’s favor. These two central questions in competitive strategy have been at the core of my research.”

2- “The ability of firms to shape industry structure places a particular burden on industry leaders. Leaders’ actions can have a disproportionate impact on structure, because of their size and influence over buyers, suppliers, and other competitors. At the same time, leaders’ large market shares guarantee that anything that changes overall industry structure will affect them as well. A leader, then, must constantly balance its own competitive position against the health of the industry as a whole. Often leaders are better off” taking actions to improve or protect industry structure rather than seeking greater competitive advantage for themselves.”

3- “The second central question in competitive strategy is a firm’s relative position within its industry. Positioning determines whether a firm’s profitabihty is above or below the industry average. A firm that can position itself well may earn high rates of return even though industry structure is unfavorable and the average profitability of the industry is therefore modest. The fundamental basis of above-average performance in the long run is sustainable competitive advantage. ^ Though a firm can have a myriad of strengths and weaknesses vis-a-vis its competitors, there are two basic types of competitive advantage a firm can possess: low cost or diff’erentiation. The significance of any strength or weakness a firm possesses is ultimately a function of its impact on relative cost or diff’erentiation. Cost advantage and differentiation in turn stem from industry structure. They result from a firm’s ability to cope with the five forces better than its rivals. The two basic types of competitive advantage combined with the scope of activities for which a firm seeks to achieve them lead to three generic strategies for achieving above-average performance in an industry: cost leadership, diff’erentiation, and focus. The focus strategy has two variants, cost focus and differentiation focus.”

4- “The ability to be both low cost and differentiated is a function of being the only firm with the new innovation, however. Once competitors also introduce the innovation, the firm is again in the position of having to make a tradeoff.”

5- “Linkages among value activities arise from a number of generic causes, among them the following: The same function can be performed in different ways…The cost or performance of direct activities is improved by greater efforts in indirect activities…Activities performed inside a firm reduce the need to demonstrate, explain, or service a product in the field…Quality assurance functions can be performed in different ways.”

6- “Exploiting linkages usually requires information or information flows that allow optimization or coordination to take place. Thus, information systems are often vital to gaining competitive advantages from linkages.”

7- “Cost dynamics occur because of the interplay of cost drivers over time, as a firm grows or as industry conditions change. The most common sources of cost dynamics include: Industry Real Growth…Differential Scale Sensitivity…Different Learning Rates…Differential Technological Change…Relative Inflation of Costs…Aging…Market Adjustment.”

8- “Steps in Strategic Cost Analysis…1. Identify the appropriate value chain and assign costs and assets to it. 2. Diagnose the cost drivers of each value activity and how they interact. 3 Identify competitor value chains, and determine the relative cost of competitors and the sources of cost differences. 4. Develop a strategy to lower relative cost position through controlling cost drivers or re-configuring the value chain and/ or downstream value. 5. Ensure that cost reduction efforts do not erode differentiation, or make a conscious choice to do so. 6. Test the cost reduction strategy for sustainability.”

9- “Steps in Differentiation…I. Determine who the real buyer is…2. Identify the buyer’s value chain and the firm’s impact on it…3. Determine ranked buyer purchasing criteria…4. Assess the existing and potential sources of uniqueness in a firm’s value chain…5.Identify the cost of existing and potential sources of differentiation…6.Choose the configuration of value activities that creates the most valuable differentiation for the buyer relative to cost of differentiating…7.Test the chosen differentiation strategy for sustainability…8.Reduce cost in activities that do not affect the chosen forms of differentiation.”

10- “Technological change is not important for its own sake, but is important if it affects competitive advantage and industry structure. Not all technological change is strategically beneficial; it may worsen a firm’s competitive position and industry attractiveness. High technology does not guarantee profitability. Indeed, many high-technology industries are much less profitable than some “low-technology” industries due to their unfavorable structures.”

11- “Formulating Technological Strategy…1. Identify all the distinct technologies and subtechnologies in the value chain… 2.Identify potentially relevant technologies in other industries or under scientific development…3.Determine the likely path of change of key technologies…4.Determine which technologies and potential technological changes are most significant for competitive advantage and industry structure…5.Assess a firm’s relative capabilities in important technologies and the cost of making improvements.6.Select a technology strategy, encompassing all important technologies, that reinforces the firm’s overall competitive strategy.”

12- “Competitors are not all equally attractive or unattractive. A good competitor is one that can perform the beneficial functions described above without representing too severe a long-term threat. A good competitor is one that challenges the firm not to be complacent but is a competitor with which the firm can achieve a stable and profitable industry equilibrium without protracted warfare. Bad competitors, by and large, have the opposite characteristics. No competitor ever meets all of the tests of a good competitor. Competitors usually have some characteristics of a good competitor and some characteristics of a bad competitor. Some managers, as result, will assert that there is no such thing as a good competitor. This view ignores the essential point that some competitors are a lot better than others, and can have very different effects on a firm’s competitive position. In practice, a firm must understand where each of its competitors falls on the spectrum from good to bad and behave accordingly.”

13- “To segment an industry, then, four observable classes of segmentation variables are used either individually or in combination to capture differences among producers and buyers. In any given industry, a, any or all of these variables can define strategically relevant segments: Product variety. The discrete product varieties that are, or could be, produced. Buyer type. The types of end buyers that purchase, or could purchase, the industry’s products. Channel (immediate buyer). The alternative distribution channels employed or potentially employed to reach end buyers. Geographic buyer location. The geographic location of buyers defined by locality, region, country, or group of countries.”

14- “Industry Segmentation: 1) Identify the discrete product varieties, buyer types, channels, and geographic areas in the industry that have implications for structure or competitive advantage 2) Reduce the number of segmentation variables by applying the significance test 3) Identify the most meaningful discrete categories for each variable 4) Reduce the number of segmentation variables further collapsing correlated variables together 5) Plot two-dimensional segmentation matrices for pairs of variables and eliminate correlated variables and null segments 6) Combine these segmentation matrices into one or two industry segmentation matrices.”

15- “Sharing activities among business units is, then, a potential substitute for market share in any one business unit. A firm that can i share scale- or learning-sensitive activities among a number of business units may neutralize the cost advantage of a high market share firm competing with one business unit. Sharing is not exactly equivalent to increasing market share in one business unit, however, because a shared activity often involves greater complexity than an equivalent scale activity  serving one business unit. The complexity of a shared logistical system involving ten product varieties may increase geometrically cc compared to one that must handle only five. The added complexity becomes a cost of sharing.”

16- “Formulating Horizontal Strategy: 1. Identify all tangible interrelationships…2. Trace tangible interrelationships outside the boundaries of the firm… 3. Identify possible intangible interrelationships…4. Identify competitor interrelationships…5. Assess the importance of interrelationships to competitive advantage…6. Develop a coordinated horizontal strategy to achieve and enhance the most important interrelationships…7.Create horizontal organizational mechanisms to assure implementation.”

17- “While there are many non-Japanese firms that have achieved interrelationships, a number of characteristics of many, though not all, Japanese firms make them well positioned for exploiting interrelationships: -strong belief in overarching corporate themes -internal development of new businesses -a less rigid tradition of autonomy -more flexible incentives, less based on business unit results -willingness to centralize activities -greater tradition of committees and frequent personal contact among executives -intensive and continuing in-house training -corporatewide hiring and training”

18- “Complements are pervasive in industries. A firm must know what complementary products it depends on, and how they affect its competitive advantage and the structure of the industry as a whole. A firm must decide which complements it should produce itself, and how to package and price them. Bundling and unbundling of complements to package and price them. bundling and unbundling of complements is one of the ways in which fundamental industry restructuring takes place. The challenge is to make strategy towards complements an opportunity rather than a source of competitive advantage for competitors.”

19- “An industry scenario is an internally consistent view of an industry’s future structure. It is based on a set of plausible assumptions about the important uncertainties that might influence industry structure, carried through to the implications for creating and sustaining competitive advantage. An industry scenario is not a forecast but one possible future structure. A set of industry scenarios is carefully chosen to reflect the range of possible (and credible) future industry structures with important implications for competition. The entire set of scenarios, rather than the most likely one, is then used to design a competitive Strategy. The time period used in industry scenarios should reflect  the time horizon of the most important investment decisions.”

20- “The best way to deal with uncertainty is to make a conscious choice to follow one or more approaches, rather than a choice based on inertia or an implicit scenario. Weighing the factors involved in choosing 5 an approach described above requires a logic for each scenario that portrays the interdependencies between various aspects of industry structure. The most challenging part of dealing with uncertainty is to find creative ways to minimize the cost of preserving flexibility or hedging, and to maximize the advantages of betting correctly. Understanding the way in which each activity in the value chain can contribute to competitive advantage under the various scenarios may allow the firm to do so.”

21- “Conditions for Attacking a Leader: Successfully attacking a leader requires that a challenger meet threes basic conditions: 1. A sustainable competitive advantage…2. Proximity in other activities…3. Some impediment to leader retaliation.”

22- “Some important industry signals of leader vulnerability include: -discontinuous technological change -buyer changes -changing channels -shifting input costs or quality -gentlemen’s game…The following traits of industry leaders are signs of possible vulnerability: -struck in the middle -unhappy buyer -pioneer of current industry technology -very high profitability -history of regulatory problems -weak performer in the parent company portfolio.”

Regards,

Omar Halabieh

Competitive Advantage

On Made In Japan

I recently finished reading Made In Japan – Akio Morita and SONY – by Akio Morito with Edwin M. Reingold and Mitsuko Shumomura.

Below are key excerpts from the book that I found particularly insightful:

1- “I have always believed that a trademark is the life of an enterprise and that it must be protected boldly. A trademark and a company name are not just clever gimmicks—they carry responsibility and guarantee the quality of the product. If someone tries to get a free ride on the reputation and i the ability of another who has worked to build up public trust.”

2- “In the beginning, when our track record for success was not established, our competitors would take a very cautious wait-and-see attitude while we marketed and developed a new product. In the early days, we would often have the market to ourselves for a year or more before the other companies would be convinced that the product would be a success. And we made a lot of money, having the market all to ourselves. But as we became more successful and our track record became clearer, the others waited a shorter and shorter time before jumping in. Now we barely get a three-month head start on some products before the others enter the market to compete with us with their own version of the product we innovated. It is flattering in a way, but it is expensive. We have to keep a premium on innovation.”

3- “My point in digressing to tell this story is simple: I do not believe that any amount of market research could have told us that the Sony Walkman sensational hit that would spawn many imitators. And yet this small item has literally changed the music-listening habits of millions of people all around the world.”

4- “It was this kind of innovation that Ibuka had in mind when we wrote a kind of prospectus and philosophical statement for our company in the very beginning: “If it were possible to establish conditions where persons could become united with a firm spirit of teamwork and exercise to their hearts’ desire their technological capacity,” he wrote, “then such an organization could bring untold pleasure and untold benefits.” He was thinking about industrial creativity, something that is done with teamwork to create new and worthwhile products. Machines and computers cannot be creative in themselves, because creativity requires something more than the processing of existing information. It requires human thought, spontaneous intuition, and a lot of courage, and we had plenty of that in our early days and still do.”

5- “My view was that you must first learn the market.. learn how to sell to it, and build up your corporate confidence before you commit yourself. And when you have confidence, you should commit yourself wholeheartedly.”

6- “…no matter how good or successful you are or how clever or crafty, your business and its future are in the hands of the people you hire. To put it a bit more dramatically, the fate of your business is actually in the hands of the youngest recruit on the staff.”

7- “When most Japanese companies talk about cooperation or consensus, it usually means the elimination of individuality. At our company we are challenged to bring our ideas out into the open. If they clash with others, so much the better, because out of it may come something good at a higher level. Many Japanese companies like to use the words cooperation and consensus because they dislike individualistic employees. When I am asked, and sometimes when I am not, I say that a manager who talks too much about cooperation is one who is saying he doesn’t have the ability to utilize excellent individuals and their ideas and put their ideas in harmony. If my company is successful, it is largely because our managers do have that ability.”

8- “Management officers, knowing that the company’s ordinary business is being done by energetic and enthusiastic younger employees, can devote their energy and effort to planning the future of the company. With is in mind, we think it is unwise and unnecessary to define individual responsibility too clearly, because everyone is taught to act like a family member ready to do what is necessary. If something goes wrong it is considered bad taste for management to inquire who made the mistake. That may seem dangerous, if not silly, but it makes sense to us.”

9- “I cannot understand why there is anything good in laying off people. If management takes the risk and responsibility of hiring personnel, then it is management’s ongoing responsibility to keep them employed. The employee does not have the prime responsibility in this decision, so when a recession comes. why should the employee have to suffer for the management decision to hire him? Therefore, in times of boom we are very careful about increasing our personnel. Once we have hired people, we try to make them understand our concept of a fate-sharing body and how if a recession comes the company is willing to sacrifice profit to keep them in the company.”

10- “What you are showing to your employees is not that you are an artist who performs by himself on the high wire, but you are showing them how you are attempting to attract a large number of people to follow you willingly and with enthusiasm to contribute to the success of the company. If you can do that, the bottom line will take  care of itself.”

11- “It may sound curious, but I learned that an enemy of this innovation could be your own sales organization if it has too much power, because very often these organizations discourage innovation. When you make innovative new products, you must re-educate the sales force about them so the salesmen can educate and sell the public. This is expensive; it means investing sufficient money in R&D and new facilities and advertising and promotion. And it also means making some popular and profitable items obsolete, often the items you can make the most profit on because your development costs are paid for and these products have become easy for your salesmen to sell.”

12- “The primary function of management is decision-making and that means professional knowledge of technology and the ability to foresee the future direction or trends of technology. I believe a manager must have a wide range of general knowledge covering his own business field. It also helps to have a special sense, generated by knowledge and experience—a feel for the business that goes beyond the facts and figures—and this intuitiveness is a gift only human beings can have.”

13- “Next to lawyers, I think these people are the most overused and misused businessmen on the scene in the United States and Japan. I use consultants selectively and have found the best ones can do valuable information gathering and market analysis. But their use can be brought to ridiculous extremes, and it has been.”

14- “I think one of the main advantages of the Japanese system of management over the American or the Western system in general is this sense of corporate philosophy. Even if a new executive takes over he cannot change that. In Japan the long-range planning system and the junior management proposal system guarantee that the relationship between top management and junior management remains very close and that over the years they can formulate a specific program of action that the years they can formulate a specific program of action that will maintain the philosophy of the company. It also may explain why in the initial stages progress is very slow in a Japanese company. But once the company communicates its philosophy to all employees, the company has great strength and flexibility.”

15- “My point is that it is unwise merely to do something different and then rest on your laurels. You have to do something to make a business out of a new development, and that requires that you keep updating the product and staying ahead of the market.”

16- “My prediction is that we can enjoy our lives with less energy, less of the old materials, fewer resources, more recycling, and have more of the essentials for a happy and productive life than ever. Some people in the world, especially the Americans, will have  to learn something of the meaning and spirit of mottainai and conserve more. Step by step, year by year, we must all learn how to be more skillful and efficient in using our resources economically. We must recycle more. As to the expanding populations, that will be a challenge to everyone, for they will have to be fed. clothed, and educated. But as the standard of living of a people increases, the population tends to level off, people live a different way, acquire different tastes and preferences, and develop their own technologies for survival.”

17- “I believe there is a bright future ahead for mankind, and that future holds exciting technological advances that will enrich the lives of everybody on the planet. Only by expanding world trade and stimulating more production can we take advantage of the possibilities that lie before us. We in the free world can do great things. We proved it in Japan by changing the image of the words “Made in Japan” from something shoddy to something fine. But for a single nation or a few nations to have accomplished this is not enough. My vision of the future is of an exciting world of superior goods and services, where every nation’s stamp of origin is a symbol of quality, and where all are competing for the consumers’ hard-earned money at fair prices that reflect appropriate rates of exchange. I believe such a world is within our grasp. The challenge is great; success depends only on the strength of our will.”

Regards,

Omar Halabieh

Made In Japan

On The Master Switch

I recently finished reading The Master Switch – The Rise and Fall of Information Empires – by Tim Wu.

The main premise of the book, as stated by the author: “To understand the forces threatening the Internet as we know it, we must understand how information technologies give rise to industries, and industries to empires. In other words, we must understand the nature of the Cycle, its dynamics, what makes it go, and what can arrest it. As with any economic theory, there are no laboratories but past experience…The pattern is distinctive. Every few decades, a new communications technology appears, bright with promise and possibility. It inspires a generation to dream of a better society, new forms of expression, alternative types of journalism. Yet each new technology eventually reveals its flaws, kinks, and limitations. For consumers, the technical novelty can wear thin, giving way to various kinds of dissatisfaction with the quality of content (which may tend toward the chaotic and the vulgar) and the reliability or security of service. From industry’s perspective, the invention may inspire other dissatisfactions: a threat to the revenues of existing information channels that the new technology makes less essential, if not obsolete; a difficulty commoditizing (i.e., making a salable product out of) the technology’s potential; or too much variation in standards or protocols of use to allow one to market a high quality product that will answer the consumers’ dissatisfactions. “

Below are key excerpts from the book that I found particularly insightful:

1- “In fact, the place we find ourselves now is a place we have been before, albeit in different guise. And so understanding how the fate of the technologies of the twentieth century developed is important in making the twenty-first century better.”

2- “Schumpeter’s cycle of industrial life and death is an inspiration for this book. His thesis is that in the natural course of things, the new only rarely supplements the old; it usually destroys it. The old, however, doesn’t, as it were, simply give up but rather tries to forestall death or co-opt its usurper—a la Kronos—with important implications.”

3- “We have seen how important outsiders are to industrial innovation: they alone have the will or interest to challenge the dominant industry. And we have seen the power of considerations beyond wealth or security—factors outside the motivations of the ideal rational economic actor—in inspiring action to transform an industry.”

4- “Here, then, we come to the second weakness that afflicts centralized systems of innovation: the necessity, by definition, of placing all control in a few hands. This is not to say that doing so holds no benefit. To be sure, there is less “waste”: instead of ten companies competing to develop a better telephone—reinventing the wheel, as it were, every time—society’s resources can be synchronized in their pursuit of the common goal. There is no duplication of research, with many laboratories chasing the same invention. Yet if all resources for solving any problem are directed by a single, centralized intelligence. that mastermind has to be right in predicting the future if innovation is to proceed effectively. And that’s the problem: monopoly presumes a prescience that humans are seldom capable of. “

5- “For the combined forces of a dominant industry and the federal government can arrest the Cycle’s otherwise inexorable progress, intimating for the prevailing order something like Kronos’s fantasy of perpetual rule.”

6- “Whether sanctioned by the state or not, monopolies represent a special kind of industrial concentration, with special consequences flowing from their dissolution. Often the useful results are delayed and unpredictable, while the negative outcomes are immediate and obvious.”

7- “But what prevented monopoly and all centralized systems from realizing these efficiencies, in Hayek’s view, was a fundamental failure to appreciate human limitations. With perfect information, a central planner could effect the best of all possible arrangements, but no such planner could ever hope to have all the relevant facts of local, regional, and national conditions to arrive at an adequately informed, or right, decision.”

8- “As an object lesson in the way information networks can develop, it gives us occasion to consider what we truly want from our news and entertainment, as opposed to what sort of content we might be prepared to sustain, however passively, with our fleeting attention. For cable offered choices really only in the commercial range—(-enough, however, to suggest what a truly open medium could deliver to the nation, for better and for worse.”

9- “With its hefty capitalization, it offers the information industries financial stability, and potentially a great freedom to explore risky projects. Yet despite that promise, the conglomerate can as easily become a hidebound, stifling master, obsessed with maximizing the revenue potential and flow of its intellectual property. At its worst, such an organization can carry the logic of mass cultural production to any extreme of banality as long as it seems financially feasible.”

10- “For the information industries that now account for an ever increasing share of American and world GDP, the coming decade will be given over to a mighty effort to seize territory, to bolt the competition from its habitat. But this is not a case of one pack of wolves chasing another out of a prime valley. While it may sound fanciful, the contest in question is more like one of polar bears batting lions for domination of the world. Each animal, insuperably dominant in its natural element—the polar bear on ice and snow, the lion on the open plains—will undertake a land grab where it has no natural business being. The only practicable strategy will be a campaign of climate change, the polar bears seeking to cover as much of the world with snow as they can, while the lion tries to coax a savannah from the edges of a tundra. Sounds absurd, but for these mighty predators, it’s simply the law of nature.”

11- “The democratization of technological power has made the shape of the future hard to know, even for the best informed. The individual holds more power than at any time in the past century, and literally in the palm of his hand. Whether or not he can hold on to it is another matter.”

12- “The American political system is designed to prevent abuses of pubic power. But where it has proved less vigilant is in those areas where the political meets the economic realm, where private economic power comes to bear on public life…We like to believe that our safeguards against concentrated political power will ultimately protect us from the consequences of accumulated economic power. But this hasn’t always been so.”

13- “For history shows that in seeking to prevent the exercise of abusive power in the information industries, government is among those actors whose power must be restrained. Government may function as a check on abusive power, but government itself is a power that must be checked. What I propose is not a regulatory approach but rather a constitutional approach to the information economy. By that I mean a regime whose goal is to constrain and divide all power that derives from the control of information.”

14- “Let us. then, not fail to protect ourselves from the will of those who might seek domination of those resources we cannot do without. If we do not take this moment to secure our sovereignty over the choices that our information age has allowed us to enjoy, we cannot reasonably blame its loss on those who are free to enrich themselves by taking it from us in a manner history has foretold.”

Regards,

Omar Halabieh

The Master Switch

On Blind Spot

I recently finished reading Blind Spot – A Leader’s Guide To IT-Enabled Business Transformation by Charlie Feld.

Charlie defines the title as: ” A blind spot can be described as a subject that is obscure or unintelligible to otherwise sharp and intelligent people.  Information technology (IT), unfortunately is that kind of subject to many business leaders. I say “unfortunately” because IT can either enable or disable an enterprise to sustain vibrancy and success in the 21st century. ” He then goes on to introduce the main premise of the book: ” This book describes a framework that I have developed and improved over the last 30 years with a variety of organizations, including Frito-Lay, Burlington Northern Santa Fe, Delta Air Lines, Home Depot, and Southwest Airlines. This framework consists of four planks that form a platform for change and five phases that pace the execution over several years. Together they create a journey. The beauty of this framework is that it demystifies technology to the non-experts among us, is simple, and—like most principle-based approaches—is durable through the eras and across industries.”

Below are key excerpts from the book that I found particularly insightful:

1- “My belief is that information technology should not be viewed as a complex functional area. It is an integrating discipline that enables the other functions to operate as a seamless, well-run business.”

2- “The impetus to start making big changes in the midst of turbulent times like these may seem counterintuitive. However, right now you have what may constitute a once-in-a-lifetime license to make dramatic change. The economic downturn has created a global referendum for change, and you hold the keys to change in your organization.”

3- “I realized then that the HOW alone will never drive change in an organization. The WHY and the WHAT must also be powerful and compelling.”

4- “The WHY change (WHY do anything?). This plank gives the platform durability. It more than anything else will enable the organization to mobilize, make investments, set priorities,take risks, and sustain the effort throughout the transformation. It is the business imperative that must be articulated by the executive team, or there is no point in launching a major transformation. Crafting the WHY is the responsibility of the executive leadership team (including the CIO).”

5- “Successful modern enterprises have created a new competitive model that deals with the “and” versus the “either/or.” These enterprises are simultaneously centralized for leverage. operational excellence, and global consistency—and decentralized for insightful decision-making, innovation, and speed.”

6- “It may seem counterintuitive, but the more standardized your systems and processes are, the more flexible you can be.”

7- “Many IT investments fail or fall short because they are positioned as IT projects, when in reality they are business-change initiatives that require IT enablement. This is particularly true when you are defining the WHY change and WHAT your business architecture should be.”

8- “Plan big and implement in small chunks. That, when combined, will dramatically change the customer experience and productivity end to end. Watch for this pattern because it is the best formula for sustainable success, absorption. and affordability.”

9- “The HOW to change (HOW will we do it?). This is the pathway Tom your current model to your future model, and it is where the heavy lifting comes in for both the business and the IT organization. To be successful, the following three principles within the HOW (discussed in detail in this chapter) must be adhered to; HOW Principle I: Define and design a business, application, and technology blueprint and architecture before you begin investment and construction. HOW Principle II: Enforce a “Common Way” for development and quality engineering. HOW Principle III: Be disciplined in your approach to program and project management.”

10- “It helps you understand what you are buying, your investment risk tolerance, the level of quality you consider to be good enough, the timeline and sequencing you require—how you will phase it, where you will start, and more. You just cannot simply leave it to the electricians and the plumbers to make these decisions for you.”

11- “The most successful answer from top-performing IT organizations is to build a culture of delivery. In a delivery culture, hands-on managers lead their teams. Project administrators. human resource generalists, and financial analysts support the teams during the lifecycle of a project. They do not control the agenda, nor are they accountable for the outcomes. Top-tier technicians, architects, and leaders participate in the tollgate sessions and project reviews. These are meant to be productive, working meetings that are non-punitive and owned by the leaders of the organization.”

12- “The WHO (WHO will lead and manage the change?) This is the last plank in the platform. You will see my personal bias revealed in this chapter because, although I believe all of the planks are important, the human aspect makes the real difference! This chapter outlines the key human-resource principles required for sustained successes, including: WHO Principle I: Organization Matters WHO Principle II: Leadership Matters • WHO Principle III: Culture Matters WHO Principle IV: Performance Matters Ml of these human-resource principles matter whether you outsource, smartsource, or go it alone.”

13- “If there’s one thing I’ve learned over the years, it’s that spending most of your time as a leader on the talent dimension is the difference between winning and losing at this sport. Every organization that gets IT right is good at this dimension.”

14- “The first skill required for great leadership is pattern recognition. In essence, this is the ability to see underlying relationships and get at the meaning beneath the surface. Leaders with this skill can distinguish the important factors in a situation from the noise. demonstrate this insight to their colleagues through discussions and decisions, and craft a compelling story of the organizations challenges and opportunities…Having set the agenda, you have to sell your ideas and have the credibility that you can pull it off. Over the years, I have debated with management-development professionals about the difference between skills, competencies, qualities, and other such labels. My reaction has been to not care so much about classifications, but to instead focus on describing what a leader is and why leadership is critical. Character has been the most elusive—it’s hard to explain, but you know it when it is there. Leaders must show personal character. This means doing and saying what’s right, not just what is expedient or what others want to hear—even if it’s at substantial personal risk…The final leadership skill within this category is influence and persuasion. I am convinced that in the next few years, the importance of influence and persuasion skills for leaders will only grow…Only by persuading others to support your course can you move the organization in the right direction on a sustained basis…All of the above—building the agenda and the foundation— are critical pregame activities because the goal of every leader should be to have an impact. However, even teams with great skills and high levels of dedication can fail to have an impact because of their inability to form successful partnerships with their stakeholders, act decisively, or stay focused.”

15- “However, once you have set a course, leaders need to be resilient and solutions oriented. When there are problems—as there inevitably are—leaders will need to emphasize solutions rather than hurdles. When you are engaged in game-changing initiatives, you’re the one who needs to develop new approaches to work over, around. and through obstacles and setbacks. No matter how—or how much—you plan, in the end most great things are accomplished by resilient organizations.”

16- “A high-performing team needs trust, hope, enjoyment, and opportunity.”

Regards,

Omar Halabieh

Blind Spot