Category: Management

Inc has a special report on Sales. “Making sales is the lifeblood of any business. Lose the ability to sell effectively, and your business goes into cardiac arrest. So it’s no wonder why today’s entrepreneurs have so much to say — and learn — about increasing and making sales. Inc. helps business owners pump up their sales with entrepreneurial advice on encouraging a sales team to sell more and how to put together an A-list sales force. You’ll also find 10 tactical tips from business owners as well as expert advice on winning complex sales. Along with a few Inc. classics on effective sales strategies, this collection of information will help you get your own sales organization in order.”

Tim Bray points to an article in Wired by James Surowiecki:

Instead of looking to a single person for the right answers, companies need to recognize a simple truth: Under the right conditions, groups are smarter than the smartest person within them. We often think of groups and crowds as stupid, feckless, and dominated by the lowest common denominator. But take a look around. The crowd at a racing track does an uncannily good job of forecasting the outcome, better in fact than just about any single bettor can do. Horses that go off at 3-to-1 odds win a quarter of the time, horses that go off at 6-to-1 win a seventh of the time, and so on. Decision markets, like the Iowa Electronics Markets (which forecasts elections) and the Hollywood Stock Exchange (which predicts box office results), consistently outperform industry forecasts. Even the stock market, though it’s subject to fads and manias, is near-impossible to beat over time.

By contrast, while it’s clear that some CEOs are excellent leaders and managers, there’s little evidence that individual executives are blessed with consistently good strategic foresight. In fact, in an extensive study of intelligent CEOs who made disastrous decisions, Dartmouth’s Sydney Finkelstein writes, “CEOs should come with the same disclaimer as mutual funds: Past success is no guarantee of future success.” Even when executives are smart, they have a hard time getting the information they need – at so many firms the flow of information is shaped by political infighting, sycophancy, and a confusion of status with knowledge. Hierarchies have certain virtues – efficiency and speed – as a way of executing decisions. But they’re outmoded as a way of making decisions, and they’re ill-suited to the complex strategic landscapes that most companies now inhabit. Firms need to aggregate the collective wisdom instead.

One intriguing method of doing this is to set up internal decision markets, which firms can use to produce forecasts of the future and evaluations of potential corporate strategies.

In my Tech Talk series on Good Books, I am discussing “The Toyota Way.” The latest issue of Business Week discusses Toyota’s European plans, where its “stylish models and an innovative, superefficient factory have Renault, Fiat, and other locals worried”:

Toyota, long a marginal player in Europe, is becoming a fearsome market force as it applies itself to winning a bigger share of the Old World’s roadways. Sales in Europe rose 20.6% in the first four months of this year, following a 10.4% leap in 2003, to 835,000 cars — a dramatic performance given that the European market shrank by 1.3% last year. Those gains, fueled partly by the redesigned Yaris, pushed Toyota’s market share in Western Europe to 5.3% in April, up from 4.5% a year ago, overtaking Mercedes and Audi and edging close to Italy’s Fiat. “Every point Toyota gains is hurting the others badly,” says Peter Soliman, partner at Booz Allen Hamilton’s Dsseldorf office.

Toyota is determined to snare even bigger gains in Europe. Its goal is to up its market share there to 8% by 2010. The world’s No. 2 auto maker spent the 1990s slowly acquiring a hefty 11% chunk of the $457 billion U.S. auto market. Industry experts say the Japanese giant has a good shot at becoming one of the leading auto brands in Europe and could well exceed its 8% target. “They are producing cars Europeans really want,” says Garel Rhys, professor of automotive economics at the Cardiff Business School in Wales. “Toyota will become a major competitive threat in Europe now.”

European auto makers have more to fear from Toyota than a handful of hot models. While the Japanese powerhouse was figuring out how to build cars attractive to Europeans, it was also bearing down on costs to wield the efficiency needed to prevail in one of the world’s lowest-margin auto markets. Toyota’s management asked engineers to propose an innovative, cost-saving design for the Valenciennes facility. The result, a compact, star-shaped factory, was a first at Toyota. It features a production area with limited space to store parts or components. The 2 1/2 hours’ worth of inventory on hand is lower than at any other Toyota factory in the world.

Toyota seems to be becoming the Dell of the auto industry.

Innovation Weblog has a report by Robert Tucker on a presenation by John Seely Brown at the Front End of Innovation conference:

Leading off Day two was the bearded, soft-spoken John Seely Brown, former chief scientist of Xerox, and director emeritus of Xerox Palo Alto Research Center, whose only reference to PARC was to remind us that invention is not the same thing as innovation (PARC being famously good at the former, and less effective on the latter) before quickly going on to explore the new tools emerging to help us mine the future and to remain personally relevant in an age of discontinuity. He cited the need to fight an urban war in Iraq as being one example of generals not being prepared but reminded all of us: “The better we get at doing something, the worst we get at seeing new patterns,” he noted.

How do you look around inside your company? How do you get insights from the digital generation? How do you get insights from customers? “We treat our call centers as cost centers when we should be using them not just as tactical listening posts, but as strategic listening posts.”

Using the video games industry as metaphor, Brown pointed out that “it’s not the games, it’s the social ecology around them” that makes them a useful example of how companies must use new insights and tools to alert them to subtle changes. Not just the online playing of them but sharing of information about them between millions of players outside game makers control, which is already larger than the movie industry by a billion dollars, was Brown’s concern. “In Korea, people have practically stopped watching television; there are 26,000 game parlors in Korea alone. Another example: Computer blogs. Brown sees such self-forming communities leading companies to have to change.

“We think of consciously designing things, but … today’s kids are so busy multi-tasking that they smell their way through the web” rather than navigate, and for them the internet is like breathing, they don’t think of it as technology. In today’s networld, you pull stuff off the web and co-create new stuff and put it out there with your name on it and gain identity thereby,” he said. This has an impact on how you sell ideas. “Nobody sells ideas based on the content. We have to be able to engage the gut” to reach people today.

Robert Scoble talkd to an eBay exeuctive on a flight and gathered this info:

$7 to $8 billion runs through the eBay platform (yes, he called eBay a “platform”) every quarter.

Every hour eBay registers 3000 to 4000 new users.

This year they are expecting somewhere around $3.5 billion in revenues. That’s above expectations.

Every day about a terabyte of data courses through eBay’s data centers (most of the machines running eBay are running Windows, he told me. The back end they use is running on Sun Microsystems computers).

eBay has a high degree of customer lockin. How? Well, for one, many of their customers are getting rich (he says he knows a few power sellers who have already retired). Second, the more you buy and sell on eBay, the better your ratings, and those aren’t transferable to other auction systems.

USA Today wrote recently on the eBay ecosystem.

Bill Miller had an interesting perspective on eBay’s growth, comparing it with Microsoft at the same time in the latter’s history:

The question on eBay is simple: how long will the growth continue, and at what rate? That will determine whether it is like Microsoft in 1990, a bargain, or like most companies with high expected growth rates, a dud. Part of the answer lies in the description.

What is eBay’s business? If it is an auction site where individuals, mostly, sell unwanted items sort of like an Internet enabled flea market then it probably is fully priced. That is not how the company describes its business, though. Here is eBay’s description of what it does: “We make inefficient markets efficient.” For those who can size markets, that is all you need to know, if you believe it.

I got Microsoft totally wrong in 1990. It was a great value, and no value investors owned it. It looked expensive; it wasn’t. EBay looks expensive too. Mulligan.

He adds about the cryptic reference to Mulligan: “‘Mulligan’ in golf refers to a second shot you can take without penalty. Like a second chance to correct a
mistake; a do-over.”

William Morin and James Cabrera write about how to prepare for a job interview. A list of 25 questions (useful for interviewers also):

1. Tell me about yourself.
2. What do you know about our organization?
3. Why do you want to work for us?
4. What can you do for us that someone else can’t?
5. What do you find most attractive about this position? What seems least attractive about it?

6. Why should we hire you?
7. What do you look for in a job?
8. Please give me your defintion of [the position for which you are being interviewed].
9. How long would it take you to make a meaningful contribution to our firm?
10. How long would you stay with us?

11. Your resume suggests that you may be over-qualified or too experienced for this position. What’s Your opinion?
12. What is your management style?
13. Are you a good manager? Can you give me some examples? Do you feel that you have top managerial potential?
14. What do you look for when You hire people?
15. Have you ever had to fire people? What were the reasons, and how did you handle the situation?

16. What do you think is the most difficult thing about being a manager or executive?
17. What important trends do you see in our industry?
18. Why are you leaving (did you leave) your present (last) job?
19. How do you feel about leaving all your benefits to find a new job?
20. In your current (last) position, what features do (did) you like the most? The least?

21. What do you think of your boss?
22. Why aren’t you earning more at your age?
23. What do you feel this position should pay?
24. What are your long-range goals?
25. How successful do you you’ve been so far?

The article has suggestions on how to tackle each of the questions.

NYTimes writes about the marketplace battle between the distributor (Dell) and the innovator (HP):

The confrontation between Hewlett-Packard and Dell is more than a particularly lively bout of competition in the $106 billion-a-year printing industry. It is a clash – and an intriguing test case – of two different models of innovation and corporate strategy.

With its engineering roots and its corporate tagline “HP Invent,” Hewlett-Packard is committed to spending heavily on research and then funneling that home-grown technology into new products. Those products, in turn, must be able to command profits high enough to keep financing the corporate invention machine. Hewlett-Packard’s printing business is a showcase of success for internal innovation. Dell, by contrast, is pursuing a “virtual” research-and-development model. It does some engineering development work itself, but that typically amounts to tweaking an existing product. Dell’s main role is to scour the world for technology, fine-tune the products of corporate partners, wring costs from the supply chain and sell products directly to customers.

There is plenty of technology being developed by companies around the globe, Dell executives insist, but the technology often lacks an efficient path to the marketplace. And as it gets bigger and bigger, Dell is becoming the Wal-Mart of high technology, a marketer so powerful it can set product standards for its suppliers.

“This competition between Hewlett-Packard and Dell is a collision of two rival models of innovation,” said Henry Chesbrough, executive director of the Center for Technology Strategy and Management at the Haas School of Business at the University of California, Berkeley.

The Dell strategy is obvious: build a printer business, attack Hewlett-Packard’s crown jewel and, thus, hobble its principal rival. And Hewlett-Packard is trying to return the favor by cutting prices aggressively on PC’s with the goal of grabbing sales in the corporate PC market, which is Dell’s stronghold.

Jennifer Rice points to a Doblin Group article. The 10 types are: Business model, Networks and alliances, Enabling process, Core processes, Product performance, Product system, Service, Channel, Brand and Customer experience.

Business Week has more:

The five-year-old company faces an onslaught of competition, and its strategic position seems hopeless. Most of its customers buy stand-alone boxes, then pay $12.95 a month for TiVo’s “time-shifting” service. Now, cable companies are beginning to offer similar services for lower subscription rates with no up-front cost. Worse, Rupert Murdoch’s DirecTV, TiVo’s biggest customer, is considering using technology from another Murdoch company to replace TiVo in at least some of its satellite boxes. Investors certainly are spooked. TiVo’s stock is down 50% since last July, to less than $7. “People are assuming the worst,” says analyst David Farina of investment bank William Blair & Co.

But tap that pause button for a moment. A close look at CEO Michael Ramsay’s new plans for the company suggests that any requiem for TiVo may be premature. He’s pushing to make TiVo less dependent on stand-alone boxes by striking alliances to have TiVo’s software incorporated into hot-selling consumer electronics such as DVD recorders. He’s aiming to get more revenue from subscribers by offering them cool new features, including satellite radio, digital photo editing, and the ability to surf the Web from TiVo boxes. And although many of his customers get TiVo to avoid advertising, he expects to build a significant business from selling opt-in ads specially crafted for his much-coveted audience. “TiVo has a lot of irons in the fire. I wouldn’t write them off just yet,” says analyst Michael Paxton of researcher In-Stat/MDR.

The strategy could remake TiVo. While the company now gets 90% of its revenues from basic digital recording — customers who spend $12.95 a month or $299 for lifetime service — Ramsay expects that to drop to 33% in a few years. The rest, he figures, will be split between premium services and advertising. “TiVo can not only survive, we can grow and thrive,” he says.

George Colony (CEO of Forrester) writes:

When Jobs arrived back at Apple, he said, “Screw the software business–let’s build our own great applications!” This old computer business stratagem, dating back to the minicomputer industry, yielded the ease and elegance of one computer, one architecture, one software set–openness and interoperability be damned. Without standards and third parties to worry about, you can tune your software for maximum integration and seamlessness–no bulky APIs (application program interfaces) or open drivers to file, rub and sand the cool edges off your systems. And if the software is good enough, consumers have to buy your computers to run it.

It’s not open, and it’s not industry standard or industry certified. It’s just better.

Jobs is delivering on the digital dream. While other companies in the tech industry are either stumbling (Sony), services-focused (IBM), protecting their monopolies (Intel), or shepherding their legacy systems (Microsoft), Jobs is delivering inspired, compelling digital alternatives to the old analog world. The guy has the creativity of Sergei Brin and Larry Page at Google, the experience of Michael Dell, and the connections and persuasiveness of Carly Fiorina.

What it means No. 1: To the enterprise world? Nothing. Jobs is digitizing the consumer world.

What it means No. 2: Consumer electronics vendors, whether they like it or not, will have to contend with a resurgent Apple and an omnipresent Steve Jobs.

What it means No. 3: Watch for Apple to take its music strategy (elegant integration of the personal device, desktop management software, and online music store) into new spaces. Still cameras and video cameras would be obvious markets to attack. Making mobile phones easier to use and highly integrated with the desktop could be a big win for Apple. iSync with Bluetooth would finally make it dead simple to switch phones without trashing address books.

What it means No. 4: Linux plus Apple? Somehow, you know that Jobs won’t be able to resist this one. If Jobs and team point their considerable innovation and creativity back toward desktop applications, they could blow a lot of new thinking into the market. Call it “iWorks”–an integrated desktop suite based on Linux. Apple would feature iWorks first on the Mac and then make it available on Intel machines. This would mean that 5 percent of desktops would have Linux desktops right out of the chute–a great start for the first serious Linux-based Microsoft Office fighter. This one’s a stretch, given that Mac is based on OpenBSD, not Linux. But if the opportunity becomes compelling, I’ll bet Jobs will move.