Category: Management

From Joel on Software:

If you want a platform to be successful, you need massive adoption, and that means you need developers to develop for it. The best way to kill a platform is to make it hard for developers to build on it. Most of the time, this happens because platform companies either don’t know that they have a platform (they think it’s an application) or they get greedy (they want all the revenue for themselves.)

Why are platforms important? Writes Joel: “It’s really, really important to figure out if your product is a platform or not, because platforms need to be marketed in a very different way to be successful. That’s because a platform needs to appeal to developers first and foremost, not end users.”

Continue reading Building Platforms

From the WSJ:

Leadership advice is easy to find these days: workshops, conferences and private coaching sessions, often for a hefty price, on how to make the leap from executive to leader.

Yet those who have proved their ability to inspire rarely say they were guided by formal instruction. Instead, they point to life experiences that were pivotal in helping them recognize a capacity to make things happen and to get others behind them.

Many of these people show some qualities of young children: curiosity, boundless energy to put into practice what they learn, and a willingness to pick themselves up and keep going when they fall.

Warren Bennis , founding chairman of the Leadership Institute at the University of Southern California, and Robert Thomas, senior research fellow of Accenture’s Institute for Strategic Change in Cambridge, Mass., believe all leaders have undergone at least one crucible experience that unleashed their abilities and taught them who they were.

The two professors studied 43 leaders — half of them 70 or older and half 35 and younger — for their book “Geeks and Geezers” (Harvard Business School Press) due out next month. Their transformational experiences varied from being mentored, to climbing a mountain, to losing an election, but ultimately proved more important than the person’s education, intelligence or birth order.

“Sometimes it is an event, sometimes it is a relationship … sometimes joyous, sometimes tragic … but it’s always a powerful process of learning and adaption,” they write. “It is both an opportunity and a test.”

Continue reading Crucible of Leadership

An interesting article in the Economist concludes that in the wired world, physical presence is becoming even more important:

Tony Venables, an economist at the London School of Economics, believes that businesses that thrive on face-to-face communications — or what some call F2F — now account for a growing share of economic activity.

Michael Storper of the University of California, Los Angeles, has written a paper with Mr Venables on Buzz: The Economic Force of the City. They argue that cities are where information and ideas are developed and swapped. But not all information is equal. Some (a bank statement, say, or a booking) is easily codified and electronically swapped; while some (I have a deal for you, why don’t we do it this way?) requires context and trust to be meaningful. It is the second kind of information that requires F2F.

Ubiquity (ACM) has an interview with Annabelle Gawer, the co-author of “Platform Leadership”. She talks about innovation and Linux:

[Openness] increases tremendously innovation that complements what was previously written. The old school of thought about innovation was that you had to protect everything in order to prevent substitute innovation. If you protect your innovation by a patent, it becomes unlawful to come up with a substitute during the time of the patent. The idea is a fundamental insight of economics, which is that you should protect the incentives of the innovator, because it’s very hard work to innovate. There’s a lot of trial and error, but once you’re done it’s easy for someone else to imitate you. If there were no protection then the innovators would stop trying to innovate because they would not have economic benefit. This philosophy underlies our whole patent system. Now, what the Linux story uncovers in a blatant way is that there are other kinds of incentives to innovate. It shows that you can open things up and not stop innovation. It might stop competitive innovation, but it doesn’t stop collaborative innovation. Those are the pluses of the Linux story.

The minuses are: How do you maintain such a product over the long run? Who is going to ensure the maintenance, which is less exciting than being a wonderful hacker inventing genius code? You need to have sound commercial organization behind it, and for that kind of thing to happen you need to have the traditional business incentives and therefore you need to protect from imitation. How do you reconcile openness and closeness? How to reconcile creativity and maintenance over the long run hasn’t been resolved yet. But I think the Linux story has expanded our understanding of the phenomenon of innovation.

Also see: my earlier post on this topic.

Writes the Economist:

Alone among Hong Kong’s property tycoons, Mr Li knew when to branch out overseas and into new industries. Equally rare, he always found and hired the best professional managers, many of them foreigners. Most importantly, his investment record has, so far, outperformed that of all other Asian tycoons. Everyone who has worked with him raves about his nose for opportunity.

Like Mr Buffett, he appears to look for value, but comparisons with the Sage of Omaha are overdone. Mr Buffett crunches piles of numbers in the search for undervalued companies, then holds their shares indefinitely. Mr Li, by contrast, is, on the face of it, the archetypal Asian asset-trader. He tries to time the market. He is patient but swoops with phenomenal speed when opportunities present themselves. Global Crossing is a case in point. It has few synergies with Mr Li’s other telecoms assets. Mr Li first made an offer in January, then withdrew it, and then came back with a new offer, two-thirds lower.

FastCompany writes about lessons learnt by Microsoft Project’s GM, stating: “We live in a project world, where project managers and project teams work together to deliver results on time, on budget, on spec, and on the money…Project’s general manager, Chris Capossela, says that he uses his own project’s thorniest problems, and their solutions, to run better projects everywhere…In fact, in the course of upgrading Project, the project team came across a number of important lessons and improvements that can make any project more likely to succeed.”

Key Learnings:
– Expect the unexpected
– Measure work done, not hours spent working
– Don’t crack the whip; share the work
– If you want the right people, you have to know what you’re looking for

News.com writes on Legend and its future plans as it seeks to expand beyond China and PCs:

The Legend Group, which once existed only as a wholesale distributor for U.S. and European brands, has transformed itself into one of the world’s fastest-growing technology conglomerates, with its hands on everything from desktops and servers to cell phones, retail franchises and information technology services.

Legend grew shipments by 24.2 percent in 2001, Gartner analyst Charles Smulders said, and the company pulled in $2.7 billion (HK$20.9 billion) in revenue and $134 million (HK$1.045 billion) in profit for the fiscal year ended March 2002. Only Sony at 25.2 percent grew faster, he noted, while Dell grew by 18 percent, “and everybody else was negative” in 2001.

Writes Business 2.0:

Nokia’s RD apparatus is unlike anything in multinational corporate history. Most large-scale RD operations are centralized, hierarchical, no-nonsense — science as brute force. Nokia’s 18,000 engineers, designers, and sociologists are scattered across the globe and form a kind of federation of rule-breaking, risk-taking hackers. Most of them answer not to countless layers of managers but to Neuvo, who considers it his missionary duty to break down his people’s mental inhibitions, freeing their minds to roam toward the next big breakthrough. “We operate the way a great jazz band plays,” Neuvo says. “There is a leader, and each member is playing the same piece, but they can improvise on the theme.”

That approach has made some beautiful music for Nokia. Since Neuvo took over Nokia RD, its engineers have churned out an unmatched string of technical firsts: the first mass-market cell phone with the antenna on the inside, the first one-chip phone, the first compact battery with long-lasting power. Breakthrough features mean hot phones, and no competitor has come close to equaling Nokia’s record of monster product hits — it has had half a dozen models that sold as much as 50 times the company’s own internal projections. That run has enabled Nokia to amass a 38 percent share of the cell-phone market, roughly equal to that of its four biggest competitors combined. A decade ago, Nokia was close to bankruptcy; now it’s closing in on $30 billion in annual sales. It makes the vast majority of the profits generated by the entire mobile-phone industry.

An incisive analysis by the NYT on how some of the media conglomerates bet on convergence and failed, resulting in Viacom coming out ahead of the pack:

Viacom is the only global media conglomerate that never succumbed to the allure of the Internet. It has steadfastly resisted the defining “big idea” of the 21st-century media business: that the Internet will profoundly transform the way people consume information and entertainment, necessitating radical changes in the way companies distribute their movies, television shows, music and magazines.

It is not that Viacom rejects the importance of the Internet – or even the notion that it is changing the habits of consumers, particularly young ones, in ways that will generate exciting new businesses.

But unlike Bertelsmann under Mr. Middelhoff, Vivendi Universal under Jean-Marie Messier or AOL Time Warner under Gerald M. Levin and Robert W. Pittman, Viacom did not bet its corporate ranch on convergence – the marriage of old-line media assets with Internet-age technology.

Mr. Middelhoff, Mr. Messier and Mr. Pittman, the chief operating officer at AOL Time Warner, were all shown the door within three weeks of one another. So if career survival is any guide, Viacom’s pragmatic approach appears to have been the right bet.

What a turnaround in two-and-a-half-years – it was only in Jan 2000 was when AOL acquired Time Warner. People have lived a lifetime in these short years.

Clay Christensen is the author of “The Innovator’s Dilemma”. Jim Collins is the author of “Guilt to Last” and “Good to Great”. Business 2.0 – gets the two to discuss – What Makes a Great Leader?.

Christensen: Breaking an old business model is always going to require leaders to follow their instinct. There will always be persuasive reasons not to take a risk. But if you only do what worked in the past, you will wake up one day and find that you’ve been passed by.

Collins: Of all the persistently good companies we studied in Good to Great, only one was led by a CEO who had an MBA. The most common academic background, oddly enough, was law. I asked one of the CEOs how law school helped prepare him to be a business leader, and he replied, “It taught me to ask the right questions rather than come up with the right answers.”