Categories
Uncategorized

Netflix’s Big Picture

http://nyti.ms/fVo5XX

Netflix could have lost its place as a video distribution market leader if they had failed to invested in a streaming video distribution model, much like Blockbuster lost its place as a leader in video disruption to a mail distribution, disruptive innovation developed by Netflix. Currently Netflix is a front-runner in streaming video technology and distribution. They managed to innovate from with and change their mail distribution model rather than being overtaken by an outside competitor. A key reason for this is the way they envision the goal of their business: “Reed Hastings, the chief executive and co-founder, had always thought of Netflix as an entertainment distribution service rather than a mail-order company.” Looking at the big picture of bringing videos to consumers, rather than myopically focusing on the process by which they achieved that goal helped inspire innovation from within.

Categories
Uncategorized

Gartner Reveals Five Social Software Predictions for 2010 and Beyond

In the collaboration module, we have seen how effective collaboration can help enterprises in different situations. Effective collaboration could boost innovation, decision making process, and bring outstanding results to companies. But how do we promote and manage collaboration in a company and what tools to be used for this purpose? These are areas that must be analyzed carefully before taking any steps toward implementing and improving a collaborative environment.
Gartner recently revealed its predictions about social software usage after 2010 and their roles in enterprise collaboration. Gartner’s report is about emerging collaboration tools and how they would play a different role within enterprises and how people collaborate in the near future.
Most of us have seen or probably tried a few number of collaboration tools and we know how they encourage/discourage people to collaborate. I could not say to what extent all Gartner’s predictions are likely to come true. But Gartner performed a good job at least in challenging the readers and also warning top management about the future changes.
For example, the first prediction -social networking services as a substitute for email- depends on how we define ‘social networks’. Some ‘social networking’ sites are in fact professional sites geared towards professional advancement, rather than socializing or befriending others. I believe Linked-in could be a good example of what Gartner is talking about here.
The second prediction is about microblogging; definitely microblogging is great. But I have a feeling that much blogging is becoming something akin to writing diaries. It is a great way of recording thoughts but do employees have the time to read their co-worker’s microblogs? The proliferation of information has already overwhelmed us from filtered streams (online news, feeds, etc.) let alone unfiltered thoughts of our colleagues. I agree with the article that scalability is a problem for enterprise microblogging. However that may or may not be the primary challenge for them. The efficacy of information is a more fundamental a problem.
The fourth prediction talks about collaboration and smartphones. I really believe in the future of mobile technology. I am just wondering about the limits, as I remain optimistic. Will the majority of our communication needs be addressed with apps? Mobile poses a lot of challenges that are as yet unsolved. Usability is still a huge challenge and human machine interfaces are still dangerously unhealthy.
These predictions challenged me to thinking more about the importance of setting and diffusing effective collaboration ground rules in companies. As long as enterprises are not aware of good vs. bad collaboration and employees do not understand when/where/what to collaborate, IT breakthroughs are not likely to help a lot in this area. This is a strategic decision left for the top management to how to catch up with and get benefit from organizational and social behavior changes in the near future. If Gartner report is to be true, who is/are responsible to take the right action before it becomes too late to manage? I believe there are still some strategic issues to be addressed before melting into the new realm.
Categories
Uncategorized

Management skills you need to run a criminal organization

This article, which ran in the New York Times a few weeks ago, is absolutely fascinating; it’s about Albert Gonzalez, the man who was behind the credit card hacking at TJMaxx and many others (for those of you who’ve taken 206 – this is the FTC settlement case that we read about). Apparently, while he’s not a strong programmer, he’s absolutely brilliant at figuring out ways to hack into systems. He was recruited to help the US Justice Department catch hackers, but was double-crossing them at the time.

A detail that I found especially pertinent were the descriptions of his leadership skills, which I found amusing because we’ve talked about the skills that managers need to lead companies. But criminals need management skills as well, and they encounter just as many problems with information management; something to keep in mind…

From the article: Indeed, no one I spoke with compared him to a gangster or a mercenary — preferred honorifics among hackers — but several likened him to a brilliant executive. “In the U.S., we have two kinds of powerful, successful business leaders. We have people like Bill Gates and Steve Jobs, who are the most sophisticated of electronic technicians and programmers,” says Steve Heymann, the Massachusetts assistant U.S. attorney who, in the spring of 2010, secured a combined 38 years of prison time for Gonzalez and his co-conspirators for their corporate breaches. “Then we have others, like the C.E.O.’s of AT&T or General Electric, who are extremely good in their area but also know when to go to others for expertise and how to build powerful organizations by using those others. Gonzalez fits into that second category.”

An assistant US Attorney describes Gonzalez this way: “As a leader? Unparalleled. Unparalleled in his ability to coordinate contacts and continents and expertise. Unparalleled in that he didn’t just get a hack done — he got a hack done, he got the exfiltration of the data done, he got the laundering of the funds done. He was a five-tool player.”

Categories
Uncategorized

Don Tapscott on mass collaboration

This is not really an article, but I think this video applies itself readily to the collaboration module that we studied in class. Macrowikinomics is a book written by Don Tapscott and Anthony D. Williams about the evolving modes of problem solving through the use of the collaborating on the Internet. They argue that the collaboration efforts facilitated by our online networks can not only fundamentally change the economy but all of society and that the companies who are able to embrace this new phenomenon will be able to succeed. They are noticing that these types of outward looking collaboration efforts are increasingly becoming a common place in business and societal changes.

Don highlights a number of situations where companies have very successfully collaborated. In China a group of parts manufacturers were able to pool their resources in order to form a motorcycle manufacturing cooperative. A collaboration effort made possible through the Internet.

He also mentioned Proctor and Gambles Ideagora and how they are able to successfully collaborate outside of their company. Noting that 50% of their innovation comes from outside. Instead of having the “Not invented here syndrome” they profess to having the “Proudly Found Elsewhere” syndrome. Scientists inside the company are compensated to look for the best innovations.
Categories
Uncategorized

Fiat and Chrysler. Collaborate or lose.

At this crucial time in Fiat’s history, they are forced to either collaborate effectively or die out. Just recently the Italian car company Fiat purchased a large portion of Chrysler through an international deal to save the company from bankruptcy. The two automakers, both struggling regionally, will come together to create a global competitor. The expanded production facilities means that they will be able to produce cars anywhere in the world, reducing shipping costs. For this vision to successfully occur, the two companies need to effectively transfer knowledge and integrate product lines. On the engineering side, the old Chrysler cars and Fiat cars need to be outfitted with the best of the two technologies. On the operations side, new efficient means of production needs to be planned out to fully utilize all the new resources to mitigate costs.
Fiat also has a few difficult decisions to make at their home in Italy. Do they continue to produce cars in Italy, a place where they are losing money, or move production else where and risk the backlash of Italian employees. Their current plan is to expand production in exchange for a new pay structure that would allow Fiat more flexibility in compensation.

Categories
Uncategorized

“Dead Certain”

An insightful review of President George W. Bush’s recently released memoir titled “Decision Points” (George Packer, The New Yorker) paints the ex-president in a harsh light.  Bush, it could be argued, was the quintessential charismatic leader whose word was (sometimes literally) law.  He didn’t hesitate to make decisions (often to the detriment of the country), and often caused a loss of agency for his subordinates. Packer writes, “Bush once told an elementary-school class in Crawford, Texas, ‘Is it hard to make decisions as president? Not really. If you know what you believe, decisions come pretty easy. If you’re one of these types of people that are always trying to figure out which way the wind is blowing, decision making can be difficult. But I find that I know who I am. I know what I believe in.’ For Bush, making decisions is an identity question: Who am I? The answer turns Presidential decisions into foregone conclusions.”  So when it came to decisions about invading Iraq, water-boarding as an interrogation technique, or unlawful surveillance of American citizens, his reasoning was quick and direct, American’s have been hurt by insurgents, therefore the end justifies the means.  He did not consider the moral or practical consequences of his decisions, only the emotional ones.  In striking similarity to Rob Hall’s team on mount everest, Bush’s leadership style was authoritative and over confident.  He planned for the best case scenario and continued on, despite turbulent events, well past the “trun-back point,” and, it could be argued, he got a lot of people killed.

Categories
Uncategorized

Innovation in Pharma: More Art than Science says The Economist

Pharmaceutical companies have a timer against which they must innovate.  Once drugs lose patent protection stiff competition emerges from generic pharmaceutical companies.  The key metric to measure innovation at a particular firm is the comparison of the number of new patents to the number of expiring patents.  This article from The Economist believes that the industrialized processes of pharmaceutical laboratories are not effective enough, too much money is being spent and shareholders are starting to lose their patience.  As a solution, the article urges big pharma to increase their partnerships with academic and small speciality research companies.  One striking quote from the article reads that pharma should “empower creative talent in the discovery phase of R&D by creating an environment in the labs that reflects the fact that discovering a drug is as much an art as it is a process.”
Categories
Uncategorized

The 4th Quadrant of Innovation

INFO 225’s first module focused on innovation processes within a firm.  The article linked to below takes a more global view and discusses the type of innovation (activity of the profit seeking firms) outlined in 225 as one of four ways in which innovations emerge in the world.

If innovation is our goal for the sake of human progress should we be looking to for-profit firms to achieve this? A very interesting article in the New York Times by Steven Johnson discusses where good ideas come from.  After laying out the landscape Johnson discusses how type 4 is not easily categorized with the modern language of politics nor business and therefore is difficult to discuss openly.

The Four Quadrants of Innovation

1. classic solo entrepreneur doing it for the money

2. amateur individual doing it for the love

3. private corporations collaborating on ideas while simultaneously competing with one another

4. non-proprietary, collaborative innovation (i.e. GPS, the internet, biomedical inventions)

Johnson acknowledges the 4th quadrant is not the end of the story.  “This fourth space creates new platforms, which then support commercial ventures.”

Categories
Uncategorized

Qantas Crisis: Adhoc Collaboration

Human Ingenuity Saved the Day for Plane in Crisis

In November of 2010, a Qantas airplane lost an engine as it flew over Indonesia. The article, titled “Human Ingenuity Saves the Day for Plane in Crises,” reminded me of the Mount Everest case in that the pilots had a small window of time in which to save the plane of perish.

In addition to the two pilots in the pit, two other pilots (captains) were on the flight. It’s noted that between them they had 100 years of experience. Still, the four pilots had to work together and remain relatively calm to safely land the plane. Although the article doesn’t explicitly discuss management, I assume that training procedures at Qantas addresses the preferred way to handle emergency situations. For example, the pilots had instructions (in a manual) on how to handle error messages. However, with over 50 error messages flashing across the screen and visible flames near a wing, the four pilots had to divide and prioritize tasks.

This example isn’t directly related to course topics since the management trail and company culture isn’t noted in the article. However, the pilots are a great example of an ad hoc team working seamlessly together in a time of great crises.

Categories
Uncategorized

Collaboration Required in Pharmaceutical Industry

Pharmaceutical industry is in a state of crisis. That’s the message Ted Torphy, VP from Johnson & Johnson, sent to us in his Berkeley talk.  The reason? A lack of innovation, not in terms of technological ones in R&D, rather, R&D business models innovations.

Developing a new drug is a lengthy and costly process, averaging 11 years and $1bn. And, in addition to big Pharmaceuticals, it involves participations of multiple entities including Academia, Venture Capitals (VCs), Government, and Public Markets. Following graph lists the traditional drug development lifecycle along with its participants (ranked by their contributions) at various stages.

DrugDevProcess

(Just for explanation purposes, Phase I is to test the safety of the drug. Phase II is divided into two sub phases where II a tests if the drug works for the targeted population and II b is to identify the right dose of the drug. And Phase III deals with large scale clinical testing.)

Research suggested that out of $1bn R&D investment, 35-40% went to stages before Phase II b (early-stage development), and the most importantly, success rate jumped up from 1.5% at “Innovation” to 50% when it came to Phase II b. So, in the pharmaceutical world, the stage right before Phase II b is called “Clinical Proof of Concept”, and they want to bring drugs to pass that stage more rapid and economical. To do that, they started to acquire new biotech companies that already have some success in early-stage development instead of investing tremendous resources in their own R&D. This mindset results in the fact that biotech organizations are becoming the source of new products. However, risky nature of this early-stage development together with the requirement of a big lump-sum up-front investment usually turns away interested VCs, which causes an investment gap between basic research and late-stage drug development.

What is the proposed solution? Dr. Torphy recommended “Virtual Integration”. Contrary to “Vertical Integration”, where firms gain top-down controls for everything and “Vertical Disintegration”, where companies outsource to others services/products that are not in line with their core businesses, “Virtual Integration” encourages collaborations or alliances among businesses to share competencies, infrastructure, intellectual capital, risk and rewards.

He argues that this is beneficial to all the stakeholders in the ecosystem. For example, large pharmaceuticals can benefit by expanding pipelines with an external portfolio of product opportunities, minimizing fixed costs and infrastructure while maximizing flexibility. VCs can reduce their capital investments by gaining access to pharmaceuticals’ infrastructure and expertise. Academia, on the other hand, will have the ability to tap into external funding resources.

“Virtual Integration”, in a sense, is Open Innovation, embracing the expertise and resources from partners, suppliers, R&D institutions, etc. But as Dr. Torphy suggested, it is not easy to sell the concept. It requires all the participants to share the same collaboration mindset, to overcome the “Not-Invented-Here” barrier and to create a fluid system to exchange ideas, expertise and resources.