The Biz School Chronicles :: The Five Competitive Forces That Shape Strategy

It's exam time again and I'm feeling the pressure. Stacks of books to read, notes to make. And then there are those Financial Management and Operations Research formulas. As usual the Internet is a major source of reference. Studying becomes that much easier when everything is stored in a searchable index on line. The best part is that in most cases, instead of just reading a quote in a text book, you can directly hear it from the one who said it in the first place.

I came across Porter's Five Forces quite a few times while studying (It's mentioned everywhere from Marketing to MIS) and thought, why not hear it straight from the source? Let me tell you, it's one thing to read quotes and excerpts in text books and a completely different experience when you hear the original thinker explain it. In case you are wondering here's what you would see in a text book (more like a copy paste of Wikipedia).

"Porter's five forces analysis is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. It uses concepts developed in Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition"."

Boring as watching paint dry right? Well, it was for me. And memorizing theory direct off the text book never works for me. But I like images though. Charts and graphs seem to get imprinted in my head better than any other form of data representation.



But my brain still wasn't giving me the right signals. It's giving me the "You have read!" stimuli but not "You have learnt!", which is what I want at this particular instance. There's a huge difference between those two individual signals. If you are simply satisfied with the first, you will get burnt at some point. So I finally turned to Google and came across this next video, where Michale Porter himself explains one of his most cited works.

Social Media and its challenges to businesses

Those who read my posts know that I'm interested in Social Media. Not only just the (obvious) social benefits, but also the potential for their usage in business. But of late, it's clear that most view social media as just another form of marketing than properly integrating it to their business. When I went through a sample of my Twitter followers, it was clear that quite a few are affiliate marketers. There's nothing wrong with this, mind you. But I think from a Business perspective, this is just one way of looking at social media.

As I highlighted a few weeks ago, just like any other strategy your social media strategy needs design too. As usual, I added some of my thoughts while quoting the original author, David Armano. Today I came across a nice follow-up post from the same author, identifying 5 key challenges to overcome while adopting social media in a business. This is clearly better structured than my random comment :) The following 5 challenges are explained in detail.

1. Integration
2. Governance
3. Culture
   
4. Human Resources
   
5. Measurement of ROI

Good read ...

HBR :: On Bad Decision Makers

Why Jerks Are Bad Decision-Makers - Tom Davenport - HarvardBusiness.org

So what are the mechanisms that translate being a jerk into being a poor decision-maker? Jerks tend to think their own perspectives are the only ones worth considering, but good decisions require serious consideration of alternatives. Jerks think they're never wrong, but good decisions require acknowledging and learning from mistakes. Jerks are consumed with petty resentments and grievances, but good decisions require clear-headed, objective thinking. Jerks alienate other people, but good decisions require collaboration across a social network (as a recent MIT Sloan Management Review article by Rob Cross and Bob Thomas suggests.) This falls short of a complete description of either jerkdom or decision excellence, but you get the picture.

Jerks often seem to get ahead in firms and advance through the ranks, but that's a dangerous phenomenon. If you want good decisions in your organization, don't hire, promote, or retain jerks.

Well.. I can't add anything more without turning this post into a rant. So just read the post above. My view is that you really can't control what type of individual becomes successful in a given organization's culture. I've seen decent and capable people who thrived in one organization not lasting more than a year or two in another. I've also seen those in limbo. The fighters who refuse to give up. I admire the latter. Because living is learning and you learn something new everyday.

HBR :: Microsoft and Yahoo: Too Little, Too Late, Too Hyped

Microsoft and Yahoo: Too Little, Too Late, Too Hyped - Now, New, Next - HarvardBusiness.org

So what is the new couple to do? First, admit that neither of them has all the answers. Second, look outside for best thinking on how to manage their new relationship (even if this means Microsoft learning from IBM, which needed a near-death experience to bring it to its senses in the 1990s). Finally, remember that for 1 plus 1 to equal 3, the partners must first act as 1 — any daylight between them will be room enough for Google's wedge.

Shareholders can only hope that no near-death experience will be needed to make them see this new reality.

Effective SOA Governance with the WSO2 Governance Registry

Tuesday, August 4, 2009 9:00 AM - 10:00 AM PDT

Registrations are now open!!

Governance has become the hot topic in SOA over the past year. As companies SOA usage becomes real, widespread and line-of-business, the requirement to ensure that the systems are properly governed has emerged as the number one concern for SOA adopters.
In this webinar, Paul Fremantle, CTO and Co-founder of WSO2, will explain the challenges of SOA governance and show a clear and simple approach that demystifies this complex topic.

Zappos and Amazon sitting in a tree…

Tony Hsieh's letter informing the merger, which HBR calls a Savvy Deal.

CEO Letter | Zappos.com

Today is a big day in Zappos history.

This morning, our board approved and we signed what’s known as a “definitive agreement”, in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock. Once the exchange is done, Amazon will become the only shareholder of Zappos stock.

Over the next few days, you will probably read headlines that say "Amazon acquires Zappos" or "Zappos sells to Amazon". While those headlines are technically correct, they don't really properly convey the spirit of the transaction. (I personally would prefer the headline “Zappos and Amazon sitting in a tree…”)

Guy Kawasaki’s 10 Questions to Ask Before You Join a Startup

Guy Kawasaki’s 10 Questions to Ask Before You Join a Startup | MintLife | Personal Finance News & Advice

1. How much money do you have in the bank?
2. What is your net outflow per month?
3. What is the post-money valuation of your last round?
4. What can you do that your competitors cannot?
5. What can your competitors do that you cannot?
6. Who are your investors?
7. Who is on your board of directors?
8. Has anyone in the engineering team actually shipped a product?
9. Assume that you have $0 for marketing, how would you market the product?
10. What keeps you awake at night?
    

Excellent list of questions. From my personal experience, I think it's also a wise move to ask a few more questions too. "11. What role do you see me playing in your company?". This is way different from the title. Never assume that your title alone will give you leverage to succeed in a startup, especially if you are leaving behind a fast track career in a large, well structured company. And never, ever play the 10% game when negotiating salary joining a startup.There are so many other factors that come into play. You see, startups are usually run by people who are brilliant technically but way less so in business maturity. If you think your Resume and track record will automatically get you your worth, you might be in for a surprise. Their approach for management and HR development may be at best Laissez-faire. So your first impression might very well depend on how much you demand up front. Play the 10% game and you will be screwed. Because not only will you look inferior in the eyes of those people, but also your credibility and career progression at this place will now have a shaky foundation.

So when they ask "How much?" reply with question 12. "How much do you think I'm worth? I'm not at liberty to discuss my present salary. Make an offer and let's talk!". Starting a dialogue instead of readily divulging personal information will save you a lot of grief in the long run. Because eventually you'll see this missed opportunity and it will take a huge effort to correct it, if at all possible. You might love your new work, but always remember that starting your career from scratch is not the objective when leaving for a startup.

HBR :: Yes, Your Social Media Strategy Needs Design

Yes, Your Social Media Strategy Needs Design - Conversation Starter - HarvardBusiness.org

The current state of "social media" for many businesses looks more like an episode of MacGyver than Apple's design process. Duct tape and bubble gum hold together fragile tactics such as Twitter accounts run by the summer college intern (nothing against college interns) or agency-generated Facebook fan pages that have few actual fans.

The article does layout some real problems. Most businesses want to be in social networks. It's a good move. However, what I have noticed is that most of us really don't have a clue what to do once there. I mean, we do fine with our personal social media presence. Then why do we fail when we try to replicate that success on behalf of our companies? I fully agree that we need design because, when I think about it, our personal success in social media sites neither happen overnight nor by accident.

The presence on line is just another step forward in our ever evolving personality. This is a designed process. So many people and experiences shaped us to be who we are today. Personality development and maintenance is said to be based on three axes, active-passive, pleasure-pain, and self-other. So why should we assume that a business is different? If a business can be legally considered a separate entity from its owners, it can also be considered as having its own personality. It has a vision, a mission, a 5 year plan, a 10 year plan so on and so forth. It chooses its friends and notes its enemies, while acquiring and merging in order to grow and build new alliances. Yet when it comes to social media, this personality is lost. It's usually reduced to a few random posts or tweets any spam bot can do. What we've been doing is just maintaining our presence without a strategy. Without a strategy we have no metrics. Without metrics we don't have measures of success or failure and without these measures, we can't really evolve our business's social media presence.

The 90/10 Principle - Stephen Covey

10% of life is made up of what happens to you. 90% of life is decided by how you react. If we want to receive, we need to learn to give first... Maybe we will end with our hands empty, but our hearts will be filled with love... And those who love life, have that feeling marked in their hearts.

Author: Stephen Covey
Music: Yanni (Love Songs)
Presented: P.C.Anton

Offbeat tools? Portals and Mashups are not!

At least that's what CIOs in Singapore think. According to a recent survey, 59% of the responding CIOs were increasing their investments in building applications based on portals and mashups. They are also researching heavily on cloud and SaaS, which is quite obvious due to the buzz in that space of late. This trend is interesting because the challenge for today's CIOs is two fold. Reduce costs while helping their organizations grow at the same time.

Mashups enable this by allowing re-use across the board. Why spend on building new applications from scratch when most of the required data is already available within the existing applications? If you have a SOA in place, things become much easier. But this isn't a must either. A case study I often bring up is the US Federal IT Dashboard. Although it seemed to have appeared overnight, this was an initiative started way back when Vivek Kundra was the CTO for the DC government. If you look at his work from around 2008 onwards, you'll see a nice pattern to incrementally build a successful solution using these Web 2.0 technologies.

1. Expose re-usable data as much as possible. Restrict access to sensitive data feeds. But do use a catalogue to systematically organize these feeds, so that potential consumers can easily find their way around. Make sure that the data is exposed in a standard compliant, easily consumable format (Web Services, RSS, KML, etc.). [See the DC government's data catalogue]
2. Once the catalogue is in place, encourage people to mash up the data and come up with interesting new applications. The approach you take depends on your target audience. In an enterprise setting, you should be evaluating various mashup tools available at this point. For the DC government, whose audience is the citizens, an open competition seem to have proved the best alternative. They launched a contest for mashuppers with prizes for winners. [See Apps for Democracy. The entries are closed for 2009. The second year of its existence]
3. These mashups themselves can be the sole presentation layer for certain applications. But when the demands for presenting a unified, bird's-eye view become stronger, dashboards (portals) come into play. The result of this final step is the one most talked about today, The Federal IT Dashboard. Any citizen from the President downwards can today track government spending. Just point n' click.

That's the story so far. But I feel that step 3 above can use some improvements. What if the dashboard content itself can be contributed by users? What if it was like say, iGoogle? You provide the Data Catalogue and host the Dashboard infrastructure and ask the people to come up with interesting Gadgets that harvest and display data. This will naturally lead to a Gadget Catalogue, a collection of interesting Gadgets any user can pick and choose to create his own Dashboard view. Contributions may be encouraged by a competition similar to Apps for Democracy.

A dashboard is most valuable when it can be customized by the user. Because people have different priorities and with these, the view they expect changes dramatically. If one can register, log in and change the default dashboard by adding gadgets from a catalogue and arranging them according to preference, that would be a great user experience.