November 3, 2011

Adventures in eBusiness

By now most people who have too much pre-elections time on their hands have started getting fatigued with the impossibility of sorting out political parties and have turned their attention instead to something more meaningful -- namely, the ecology and future of the Stuffosphere, which is more influential than politics anyway.

Below: the official archestra guide to the Stuffosphere. This explains why you like their stuff. It also explains why they want each other's stuff, which they can't have, so they'll have to one-up it or put each other out of business. So far, Apple is the most competent at putting other guys out of business, but that just explains why they are in this picture in the first place.They are most at risk, because their act is the easiest one to screw up.

 

 

Key points to presume, gratuitously, from the guide:

- facebook should buy Yahoo and Netflix (which then gives Microsoft something to do for a while with both Skype and Bing)

- google should consume Hulu and fix Motorola so that it can have a real tablet play and assure that YouTube dominates streaming

- apple should figure out how to absorb Pixar, Kodak's world, Adobe's world, and the Gaming worlds

- amazon should go into banking or something

 

Copyright 2011 Malcolm Ryder / archestra

Posted by Malcolm Ryder at 3:34 PM | Comments (0) | TrackBack

September 3, 2010

Performance Measurement for Services

It goes without saying that a poor-quality service will risk a short life-span and throw its provider into the dark side of relationship management with customers.

Understandably, quality management is not outranked by any other type of service management attention. But where managers depend on measurements, the most common problem is a confusion about what measurements are "quality" measures and which might be unnecessary or better suited to a different management concern. The most frequent point of confusion is with performance management.

To distinguish the two, first it is worth noting that many measurements are important to both. But as facts within a point of view, these "shared" measurements fit differently into the two perspectives.

Quality is a percentage of a level of performance achieved both without defects and within the intended structural design of the acting entity. In comparison, performance itself is a level of operation achieved versus a target level of operation. As an example highlighting the difference and the relationship, high performance may be obtained from an acting entity, but because the quality of the entity is poor, the entity may break down or be distorted by the effort to reach and sustain the high performance. Logical management approaches aim to synchronize performance expectations with identifiable levvels of quality.

In overall operations, services underpin the performance of both products and processes, while the services themselves are also managed for their own performance. Different contexts then contribute the conditions that point those performances at quality considerations.

A business process that needs support is a "problem" for which applying a service is a "solution". In general, a service is a subscribed behavior of an operation. In this way we can see how standardized observations of the performance characteristics of the operation help to account for the success or failure of the business process.

 

Posted by Malcolm Ryder at 3:34 PM | Comments (0) | TrackBack

June 22, 2010

Social Networking

Leadership effectiveness requires followership.

Following requires accepting an extrinsic agenda.

Acceptance requires accomodating the agenda within a disposition.

The disposition is a point of view from within a network of influences.

Change management must generate a disposition favorable to leadership. 

It is said, "Individuals do not evolve; individuals change, and populations evolve."

Posted by Malcolm Ryder at 10:51 PM

June 21, 2010

The Vertical Web

The periodic media campaigning for Web 2.0, 3G, Web 3.0, 4G and the rest are testimonials to the waves of functional innovation that break across the public-use digital information networks. These successive "versionings" represent a willingness on the part of network operators to try to provide relatively unprecedented capabilities with continuous -- if yet tenuous -- availability.

Although corporations are in a better position to maximally exploit new web environments, the common verification of web evolution is most strongly felt at the individual user's level, where over time the following distinctive progressions have occurred as "status quo" of reasonable expectations and the baseline expectation of using the web. In the original stage, digitization supported broadcasting; then in the next stage browsing supported the read/write web; and bandwidth pulled up the third stage. In that representation, key bundles of capability reached a critical minimal maturity at each stage and together set operational expectations.

 

Tracking such progressions always raises the question of "what next?" -- and in this case the most important next stage will find enough overall functionalities and interoperabilities such that an entire system -- and ecosystem -- for a given subject domain can be affordably traversed on the web by the individual user. This "vertical integration" means that the web will cease to be an undifferentiated "superhighway" and a series of outlets or malls, and instead become the virtual world of rich, semantically inter-activated media in which lifelike simulation will become comprehensive daily personal production: not just an internetwork of information but an internetwork of targeted special interest.

 

Typically, marketers have been working in the space to create systemic connections of interest to parties in the role of "producers" (meaning, those whose primary function is to make something from being informed, or being supplied with content); and this has been layered atop the older presence of operations by "reporters" (meaning, those whose primary function is to present information). In the next "default" iteration of the web, personal production will be attended by agents and partners, to the same degree that marketers currently scrutinize and manipulate experiences. This additional attendance will "close the loop" between an individual's internally directed (presumed) and externally directed (assumed) personae in the web environment. At that point, specialization of interest domains -- that is, channels -- will become routine and convenient as the typical organization of the web. 

Text and images copyright 2010 Malcolm Ryder / Archestra

 

Posted by Malcolm Ryder at 11:52 PM

September 1, 2009

The Media Middle

Many writers of many ilks ask the question of "where" we will be going with the new social networking tools including Facebook, Twitter and the like. It makes for fun reading, with science on one end of the spectrum and fantasy on the other. Chances are that the differences in their predictions have more to do with which writers are getting paid, which have someone's attention already, and which are seeking attention or pay versus which could care less. It might be that the most reliable statements are the ones that fall into the "notes to myself" group because they are relatively unadorned or unfettered -- whether they later prove to be right or wrong. They will be the breadcrumbs on the thinking trails that can be reviewed later and learned from, as evidence of what helps analyses succeed. But, there is this problem of whether there are too many useless crumbs with no one coming by to sweep them up. On that note, welcome to the web.

And still, below, my notes to myself.

As these social networking instruments continue to power up the breadth of opportunity for participants in the "read/write web", it becomes more evident that vast social experimentation with communications will fall into a relatively few categories of general importance.

Each of these categories will be an arena where we will see development (planned change) and evolution (adopted adaptation), and eventually we will see certain types of relationships developed and evolved between the categories as well. The categories are content, community, and channels, in the midst of which sits a media user.

 

Content

Self-publishing is the primary driver in this category, with multi-media presentation being the most compelling target. Technicians point to "rich media" on the developer side, but this is essentially about bringing portability, seamlessness and streaming to presentations. On the evolution side, the goal is convenient compilation and tagging as a way of dynamically organizing and discovering special interests. 

In fact, discovery is the key link from here to the next category.

Communities

This area is driven mostly by communications dedicated to representing and validating common interests. On the development side, discovery tools are premium; and on the evolution side, sharing is the top priority, which as a result also makes access privileges and property rights a key issue to decide.  Social policies emerge as the main indicator of evolution here, which is why the cultural dimension of social networking is most basic in this area compared to the two other areas (content and channels). 

The key link between this area and the next is targeting.

 

Channels

The exponential increase in "offered information"  does not cause a similar level of increase in "attractive content", but it clearly stages the occasion to produce more content that is attractive if the information can be appropriately contained. It seems inevitable that information consumers, who are the full population of social networkers, will not spend most of their time "boiling the ocean" by speculatively exploring unfamiliar information, much of which is hardly, if at all, "packaged". Instead that they will increasingly devote their consumption time to credibly familiar information sources. Social networkers will do an entirely traditional and conventional thing: they will more and more often pick certain routes and destinations first, and those first picks will use up most of their time and, barring interventions, become somewhat habitual. This will be the case regardless of what communication instrument is in use. Typically, when innovative instruments are released, the excitement is all about convenience and this stimulates speculative use. But familiarity of results will almost inevitably take over as the ersatz "content" either delights or frustrates -- and this will make discrimination the user's priority over convenience.

To make use of that discrimination, the link between Channels and Content is, not surprisingly, promotion.

Survival Strategies

As we can see, there is not really that much new going on in the overall dynamics of communications. Instead, there is a difference in the task-level efficiency of communications efforts, which amplifies the dynamics in various ways. Depending on who the stakeholder is, some of this amplification is deemed positive and some negative.

Arguably, fatigue is the main culprit in content, as publishers find a recurring audience more or less elusive and begin to evaluate the effort to continue publishing. Whether we point at blog graveyards or a deeper excavation of sites like Facebook, it is predictable that most publishers will significantly diminish their output over time unless they can leverage discovery to refresh their audience and thereby regain incentive to publish.

In the area of community, the most obvious dynamic is that communities are, from the bird's eye view, "chaotic", with ongoing splintering being just as important as ongoing conventions. What this really means is that communities are not so much simply environments themselves but also they are organisms within a larger environment. Organic development, assuming survival, may mean compositional change, maturity change, change in range and reach, or any mix of those changes. This is continally fortified by the ever-increasing ease of communications, which presents alternative stances and boundaries to the current community. So while communities are concerned with sustainability, what actually happens is that the community is more dedicated to the survival of "a" community than it is to the retention of most of its particular members. It is predictable that a community will diminish unless it can leverage targeting to reinforce adoption of its agenda, whether by new members or old.

And with channels, the lack of regulation means that a limitless number of potential channels compete and must rely on profiling the relationship of their content to channel users -- then promoting the profile. The underlying secret success factor, however, is that the promotion must actually change the cost effectiveness of competing --favorably for one's own channel, and unfavorably for competitors. The content itself is possibly a way to do that (think historically: MTV and "reality" shows), but such cases will be few, unusual and at best famously disruptive with an uncertain timespan of reaching evolutionary equilibrium. Some get there almost immediately, but some never quite make it.

 

So, in the full picture:

- Content is linked by Discovery to Communities

- Community is linked by Targeting to Channels

- Channel is linked by Promotion to Content

 

This is certainly not always a virtuous circle or even one that can be fully traversed by any one party. But importantly, it is more like a spring coil spiralling up and away over time/distance, while the whole coil might rock to and fro in different directions, pointing at a wide range of destination points. With predictions, one needs to consider also how long the coil is and what direction it is pointing in. In that light, what causes the coil to change directions? As of this writing, one of the curiouser matters is that promotions are getting more attention as content than is nearly any other kind of content, because there is such a frenzy about how to "monetize" social networking. But if this monetizing was not such a prominent issue, other kinds of content might be more highly valued.

This model looks an awful lot like marketing. And if marketers find it appealingly credible and familiar, they risk being accused of wielding the marketing hammer and seeing all problems as "nails". Non-marketers may be much less comfortable with it all. On the other hand, few disciplines are as relentless in their study of social communications as is marketing. So, as one of my colleagues taught me to say, this is king of the hill until somebody knocks it off.

Posted by Malcolm Ryder at 6:45 AM | Comments (0) | TrackBack

August 14, 2009

What's wrong with this Price Tag?

I'm sure that creators of ads would be amused (NOT!) to find out from media professor and consultant Jeff Jarvis that ads are not "content" !

Jarvis's stance, as reported by Stefan Deeran of BNET in the article Who Benefits from the "Link Economy", is summed up as this problem:

"In general, the consensus is that producers of original content that want to put their work behind a paywall or demand payment from linkers, just don’t get the fluidity of web."

The proof of this, they say, is that linkers prosper without paying non-ad content providers; instead, linkers get to charge the ad providers, while non-ad content providers don't get to do that.. Thus the Jarvis claim that we are shifting from a "content economy" to a "links economy".

But obviously, ads are content, and meanwhile, how many linkers actually turn a profit?

So to remain clear, the shift is about what kind of content has the most "economic" value as currency, not as net income that supports a continuation of the cash flows for non-ad content providers or linkers.

Non-ad content, now highly commoditized by the web, is most similar to currency that has suffered inflation beyond any important redemption. The "face value" has stopped being significant.

But while technology has made ad content easier to distribute, and thus magnified its face value, there is no rational proof that people suddenly prefer ads to non-ads. Instead, there is proof that ad-content providers are willing to work harder to deal with the problem of someone's "preference" than are most people willing to work on it for themselves.

As soon as non-ad content providers get people used to paid subscriptions again, the "economy" will rebalance in favor of branding, editorialism and other things that people want with non-ad content to conform to their preference.

 "Non-ad Content" providers must solve the Cost-of-Preference problem. This is already being trial-and-errored with concepts like "MyContent", "Premium Content", "Actionable Content", and so on -- and most of these approaches are long past being "new". 

But if paid "links" are simply today's version of booth rentals at a trade show, it's not the content that dissuades people from buying; rather, it's that the trade show is huge and unmanaged, so people are fatigued by it very quickly.

Posted by Malcolm Ryder at 5:05 PM

January 22, 2009

Notes 3.0 about Web 3.0

What kind of company could take advantage of the revealed "deep structure" of web 3.0? A company managing the intersections of community, culture and market.

Off-the-cuff example: a fictitious merger of Neilsen, Harris (polls), and Yahoo would go to market providing interactive services to web users that, within legal constraints, could acquire enough feedback and observation to discover hugely rich profiles of users and groups and offer the profiles in B2B transactions and public service sectors.

Posted by Malcolm Ryder at 9:50 AM

November 22, 2008

Notes 1.0 about Web 3.0

Earlier I have written about how and why I hate the "Web 2.0" shtick.

In fact, demonstrating the disregard, I've generally completely avoided any semblance of writing anything about it to anyone but an invitational or hypothetical audience. Nonetheless, the popularity of the subject leads one to things said by others that warrant being remembered and shared. In which case, there is an ethical responsibility to give credit where credit is due.

Example: by Googling the phrase "Web 3.0", find a path to Sramana Mitra and more than a year of comments about her Web 3.0 "framework". For latecomers like myself, Mitra seems to already have "celebrity status" -- albeit earned. I mention that only to point out that except for the internet's easy way of cultivating coincidences, I may have never heard of her (as I'm sure she has not heard of me). I think that very fact is one of the main and most simply profound points of having the internet at our disposal -- which is to say that it reflects more about the internet than it does about Mitra, a point about which I hope she would share my appreciation. And it should fit into her greater scope of thinking about the web.

Suffice it to say that her framework for defining Web 3.0, offered as a catchy formula (Web 3.0 = 4C + P + VS... see for yourself), provoked me to say what I have said on her website's comments and again said below. I do not agree with her definition of web 3.0, but what I'll say below is a part of a different framework that can contain the points covered by Mitra's framework or formula.

Web 1.0, 2.0 or 3.0 have different definitions depending on what kind of stakeholder is given top priority amongst the many different kinds.

Let's overgeneralize and start by pointing out that the difference between having the web and not having it is simply that the web (the "internet") is another place a person can go to do something.

The biggest difference in stakeholders is between Producers, Providers and Receivers.
All three types are consumers, but they go to the internet to consume very different classes of "content"...

• Content is simply the material that the receiver needs, that they don't already have, in order to execute individual tasks to a conclusion.
• A task can be anything from self-entertainment to industrial development.
• In every case, the task is executed to conclusion, with the content, within the "workspace" of the web, without leaving the web.

Each generation of the web offers support of the task to a different degree. One can always try to categorize known web uses; and categorization (taxonomy) frequently provokes interesting arguments: in 1.0, FTP and email. In 2.0, Amazon and streaming video. In 3.0, adhoc mashups and Second Life... etc.

However, a better instrument for understanding the evolutionary dynamics would not restrict itself to debatable examples, but instead would explain why examples fit where they do. This calls for the abstraction of a model.

In web 1.0, the recipient acquired prefabricated content in a closed package.
- Search created a transitional opportunity to web 2.0 by encouraging choice of packages.

In web 2.0, the recipient acquired prefabricated content in a modifiable package.
- Collaboration and personalization created a transitional opportunity to web 3.0 by encouraging comparative and cooperative content sourcing.

In web 3.0, the recipient acquires modifiable content in a modifiable package.
- Lacking any better term so far, invention strikes me as the transitional opportunity to web 4.0, as ontologies and cultures begin to take over a greater percentage of activities *such as* the creation and materialization of new products, outside of (but in addition to) conventional corporate instruments and academia.

What then distinguishes one web "generation" from another is the notion that an adequate level of reliability in the given generation's degree of task support can be taken for granted by most stakeholders.

And what these definitions mean, in reality, is that at any given time, some stakeholders doing some things have already been at a different generational level than others doing other things. Meanwhile, over time, the technologies and practices that emerge and mature in a generation of the internet environment also "level the playing field" across different stakeholders.

This ongoing leveling (or maturing) allows any individual participant to go to the web for more and more of the various things that constitute the individual's range of interests. As a result, the participant inhabits the internet environment more and more.

Turn off the internet, and they go somewhere else to do all of the same things, with a lot less affordable speed and range at their disposal.

All that said, it makes less sense to talk about web 1.0, 2.0, etc. than it does to talk about the relative maturity level of the internet environment as a resource (e.g. support levels 1, 2, 3, etc.).

The most interesting implications I find are these two:
- stakeholders will remain distinguishable as types, but an individual participant will occupy multiple stakeholder roles simultaneously;
- and the individual can readily change, thanks to the maturing web, from being a recipient to a provider, or from a provider to a producer. And so on.

Posted by Malcolm Ryder at 9:15 PM

August 25, 2008

Cyberpresence Socx

Some of the most nuanced things that we can encounter come from marketers. But the enduring charm of marketing is, basically, shamelessness.

That sounds bad, but the only problem with shamelessness is that it's hard to pull it off successfully, so not everybody can do it. In the strategy of shamelessness it is still, paradoxically, a requirement to maintain some cool.

This amounts to predetermining what kind of "online presence" is needed, and why -- backed of course by the right tools to generate that online presence. Where should people find you online? who should they meet when they find "you"? and why should they (from their perspective) find "you" the way that they do? Assume that they are wherever they are not because of you but because of what that channel offers them; then determine what version of yourself is appropriate to have appear in that channel. "You" might be different from one channel to another, but the different "You's" need to all be appropriate representatives of the brand you are trying to maintain.

It's pretty much like getting dressed to go out with strangers. But how hard could it be? Humphrey Bogart got to say it first: "The only cause I'm interested in is Me."

The scary part is finding out there's not much mileage in your hype. You remember: there's the famous Andy Warhol saying: "In the future everyone will be famous for 15 minutes."

As for blogs, it's more like "in the future, everyone will be famous to fifteen people." (I can't remember who it was that said that, but the quote is certainly memorable, and the citation for it is probably retrievable via Google, etc.)

There are different levels of shamelessness, with blogging and online social networking holding down the opposing goalposts. (Incidentally, Archestra is not a blog, although it runs in blogware. Archestra is, instead, just an open studio.)

Surely, blogging is important to marketing, particularly with the aspect of staging a "market" of ideas about what you sell. But blogs are just the booth in the marketplace. Blogs are inherently editorial, and the only reason we would expect one to succeed is because of the popularity of the personality that is the explicit editorial energy of the blog. (Note: not being a blogger myself, I can't claim to have any expertise on making one work; but having subscribed to several in the past, I found that I only go to the ones where I feel like I am interested in the person whose blog it is. Moreover, with zillions of blogs out there, the fatigue factor of going through yet another new blog is a real impediment that makes it just seem unnecessary. What gets me past the impediment is either a recommendation from someone or a sample of the subject handling that shows me the blogger is unusually interesting.)

Wikis are a bit like blogs in that they have a subject focus, and that subject attracts a crowd (you would hope), but the subject focus is maintained by a crowd, not by a singular editorial personality. With a wiki, one always hopes that peer criticism will culture the crowd towards "wisdom", as they like to say.

Finally (for the moment), the point of a social network is that the crowd moves its focus around and shares what it finds by talking to each other. Focal points emerge rather than being prescribed. But the sharing occurs because of people in the crowd who are already interested in each other and keep introducing who they know to other people. This thing about "buzz" is about when the communication gets flowing strongly about an emergent focalpoint.

A marketer should look at how the online forums* perform compared to each other:
- blogs establish relevance
- wikis establish credibility
- and social networks (which I hereby impertinently deem "SOCX"), being where markets actually live, establish importance

(Let's face it, most people who have used the sound "SOX" outside of baseball could not tell you who Sarbanes is nor Oxley nor whether their company would survive an audit. So why should they get to monopolize the phonemes? In the real world, social exchanges are vastly more interesting, and after I've said "blog" twice and a quick "wiki" a few times in a row I'm not interested in two-part five syllable elaborations for the rest of the choices. SOCX it is. Could be lonely, but I don't care.)

* apologies to anyone with a language degree

Posted by Malcolm Ryder at 8:49 AM

August 10, 2008

The Decisive Moment in the Garden of Good and Evil

My Strategy to win the Presidency

So, how do you get it going at such a late stage in the race?

The first part is to pick my Vice Precedent. Eventually, I’ll get caught for something, right? and why not just tell people what it is in advance, especially if it's something that's just more me? Thanks to the internet, people are confused... there’s no longer any sense of priorities amongst most of the self-indulgences that actually get us from Monday to Tuesday and from Tuesday to …

…. oh, you meant vice “president”… hmm, in that case, it would have to be the guy from truTV, Marc Juris, executive vice president and general manager, who showed me that if you can’t be the head, at least keep it on straight. For example, the other day he was saying, "Reality has a connotation of not being real, of being phony… We felt that because (our programming) was real, we couldn't call it reality." There aren’t that many people running around with that kind of clarity now.

The second part is I’m going to play the gender card.

How does that make sense? Wouldn’t you be running against two men?

Well, what difference does that make? The point is, I accuse them of being guys, and then they both screw up their responses to that more than I screw up mine. That’s what voters care about.

What’s the third part of your strategy?

It’s very simple, a call to action, but it might be hard because it calls for breaking a tough habit. When you’re president, you should have a limited number of Stupid Points to work with, not term limits. If you spend up all your Stupid Points too fast, you’re out! and someone with fewer Stupid Points should take over. This might not be the other person from your party who is hanging out in the other wing of your big white house. Think about it, if it’s your party at your house, and your party gets seriously boring, people need to be able to go to another party at somebody else’s house, right? Really, it’s not such a new idea, but we can’t be wimps about it.

Is that it? Any other parts?

Well, aside from the challenge of getting enough ME-dia attention, I’m working on getting an additional line added to the list of nominee names on the ballot, right below the third party candidates. If I’m successful, it should just say “Surprise Me: __________________”

(Happy Birthday Diana! xo - M)

Posted by Malcolm Ryder at 3:22 PM | Comments (0) | TrackBack

July 5, 2008

Beyond the Spin: Measure What You Give

Does your organization really measure what you give, or does it mainly spin what you measure?

Bruce MacEwen's industry-leading website Adam Smith, Esquire offers an opportunity to gaze into the abyss of metrics and walk away without jumping. In the article
"How High Quality Are Your Lawyers? (How Can You Tell?)"
a close reading shows contrasting business models contesting notions of "performance @ cost" and "value @ quality". In the competitive situation covered, one upstart model strategically goes after a chunk of the opponent's business by bringing customers the performance/cost equation, surprisingly leaving the traditionalist competitor to justify how pricing for that same chunk of business could rationally be based on value/quality. What makes this all interesting, notes MacEwen, is the idea that 99% of what the traditionalist does is what the upstart can steal away.

For those of us who fell out of the old hot habit of saying "disruptive innovation" once a month, this looks like news, but not new news. Still, there are some fresh perspectives worth bringing to this contest.

As seen in the diagram below, the different models above are easily distinguished by what they actually offer, making it inappropriate (for managers) and intellectually dishonest (to customers) for either of them to masquerade as the other. Customers buying into cost/performance are investing in the promise of efficiency, while those buying into value/quality are investing in the promise of reliability.

In MacEwen's article, we are sensitized to the problem that high-prestige value/quality law service firms institutionalize a significant unmanaged cost in the form of "available overachievers", against which these firms then build a hedge by charging premium prices beyond rational evidence of economy for the customer. But what is sold as the justification for this pricing? Their quality?

To be sure of avoiding management posturing, "quality" here must mean only one thing: adherence to the promised appropriateness of the deliverable versus the stated need. Consider that meaning against the question of what it takes to get quality: the value/quality firm proposes that by exceptional capability they eliminate the risk of not getting quality. Therefore, the key variable that this firm actually addresses is unpredictability in the customer's need. As an operational tactic, the value/quality firm hoards talent in order to avoid outsourcing and to presume agility.

But the cost/performance firm basically argues (by demonstration) that legal work requires only competency to sufficiently meet most stated needs -- not a matter of being exceptional but instead simply correct for the task, which eliminates unnecessary effort from the equation right off the bat. Of course this presumes a degree of predictability in scope of need -- and agreement on the scope becomes the main feature.

The discussion above intends no effort to offer a wisened critique of law firm strategy. That said, on the surface there are no truly important differences between marketing professional services in law versus other disciplines where subject matter expertise is the raw material and advice is the product.

Idiosyncracies in the legal services industry will of course provoke distinctive problems and solutions there, yet these are probably driven more by the state of mind of the customer - which is the underlying important difference because it is the competitive arena. Oversimplifying MacEwen's article, the difference between the value/quality firm and the cost/performance firm is that the former sells confidence while the latter sells credibility.

Are there spats? One accusing the other of con games, and the other accusing the first of being incredible? MacEwen's article says yes; but what is further interesting (per evidence of the illustration above) is the opportunity that both types of firms can objectively profile themselves on common ground (efficiency, capability, reliability and acceptability) -- and use those profiles to determine how to optimally segment and grow a shared market. When they don't do that, you can bet it isn't because the customers don't care.

Posted by Malcolm Ryder at 9:59 AM

June 18, 2008

When is "value" not valuable?

A wonderful discussion on Bruce MacEwen's website Adam Smith, Esquire included this challenging note from Paul Lippe about what logic is available to explain the connection between quality and value. While he questions "reputation" as an indication of warm fuzzies like "quality", he also kicks off his note citing the less fuzzy implication that better performance presumes to justify higher price:

"I'd be curious if anyone can come forth with any data to show that in fact (as opposed to in repute) more expensive law firms produce better results, e.g. can it be shown that the investment banks who had the largest losses on their mortgage portfolios were served by lower reputation law firms?

Once this conversation settles down, I will start a separate string (and perhaps a wiki to really pull something together) on what I consider to be the core issue: how can we develop a definition of VALUE in legal services that is meaningful and useful, and not simply measuring inputs like hours spent, diligence of lawyers, law school attended or reputation of the firm. With such a definition of value, I think we could expect that some lawyers' reputations and income would go up, but some would not."

Let's dig into that overall observation by making the undercurrents obvious.

1. "Value" is a label for the significant distinctions attributed to something. "Value" in professional services is 3-dimensional, at minimum. A certain method of co-operation with the customer interacts with a certain type of target outcome at a certain level of effective cost to the customer. The method, outcome, and customer cost are variables, each having a range of acceptability, which in turn allows some universe of acceptable overall impact to sprout from their combination. Now, from that dynamic, some professional service providers are great at being predictably consistent within a smaller universe (range of impacts) that the customer prefers. Some are great at being agile enough to cover a larger universe, keeping up with a customer who has more volatile preferences. And there are several other "flavors" of competency that a service provider may have. Ultimately the provider wants to be paid for the competency, and then be paid even more for a competitively greater level of competency. But the customer wants to pay for customer satisfaction, which is something different. And what mediates the balance of the two things is often just culture. I wouldn't choose to drive a perfectly good Tercel to the White House Christmas Ball, but I could; and I wouldn't choose to drive a Bentley to the 7-Eleven, but I could. In fact, I could use either car to get to either destination.



2. That's all well and good in theory, but in practice the realization of the potential value is hugely affected by the ability of the customer to appropriately and effectively align to it. (There is even plenty of historical evidence that customers sometimes buy based on how they wanna be seen, not based on how they really are.) That reality is the "forest". Relentless pursuit of profit is the bulldozer that strips the forest. Atomic metrical inputs like law schools and hours spent risk merely being "trees", where excessive attention obscures the view of the forest and therefore obscures the proper understanding of the value.
Profit and arbitrary metrics actually must not dominate an analysis of value. Instead, value, properly identified, can be correlated with profits and other interesting measures, and the correlations may be revealing or even exciting.


3. The final point from the above is that it is probably important to use rigor in discussing value, because "value" is not a reliable synonym for other things that deserve their own names, such as "competency" and "satisfaction", and "culture". It's important to know what is actually being taken into consideration and not gloss over things for convenience, because otherwise we find out too late that we're actually sitting on some key coordinate that does not allow us to "get there from here" (i.e., to the necessary value) on time. Meanwhile -- if we would like to elevate the discussion of value from the 3-D space of CustomerCost /Outcome/Method to the 3-D space of Competency/CustomerSat/Culture, while remembering to map the current coordinates in both spaces, well that's fine.

Posted by Malcolm Ryder at 12:17 PM

January 9, 2008

Run That By Me Again?

It's only January, but here, from Datamation, by Mike Elgan, is the most important IT article of the year, so designated because it whacks the pollution of communication that eventually separates responsibility and authority at the worst possible times.

Where Annoying Tech Buzzwords Come From
http://itmanagement.earthweb.com/cnews/article.php/3720391

Posted by Malcolm Ryder at 5:55 PM | Comments (0) | TrackBack

January 1, 2008

Driving Value from Change with Knowledge

Frank thoughts about why people are important to an organization mainly go down two tracks.
One track examines what is necessary for the organization to be "in the game" it plans to play... The other examines what is necessary for the organization to play the way it wants to play, when already in the game.

Few experienced people still hold on to the simplistic idea that the former track is about line workers with the latter being about the managers. Since the recognition of CRM's dominant influence on the top line of the business, ample evidence establishes that alignment of front and back offices is critical to sustaining wins. Repeatedly getting the right things to the right place at the right time for the right reason means that staff in management and in line production must both attend to operational fundamentals, and both attend to situational performance differentiators.

During the early adoption period for that principle of alignment, "knowledge worker" became a profile arguing for distinction. We identify it as a profile, and not as a role, because it is an optional mode for every role. In organizations where it actually makes sense to discuss "knowledge workers", I.T. has made the greater part of production dependent on information processing and on interpreting the status of the processing outputs. Net: in the procedural life of the organization's activity, analysts now constantly threaten to outnumber mechanics.

The appropriate new idea of worker "productivity" follows quickly on the management of information, where the issue is about what value the worker's information management should provide. In the usual formula, value is expected to result where experience influences the information management.

But there are two tracks involved in applying that experience to the information:

- keeping things the way they were designed to be; and,
- successfully adapting as necessary to changes.

Most practical experience in organizations is role-based. In fact, we must assume that managing experience through roles is the complement to managing information, with their sum being what we recognize as practical knowledge. The question that the information age has added to the foreground of this discussion is how the manager role and the line worker role respectively exercize the knowledge worker profile to provide the value expected from their roles.

Workers with a higher degree of performance recognition in the organization are most frequently those who run the second track -- adapting to change -- in the knowledge worker mode.

To point this out more specifically, it helps to identify what qualifies as "change". The table below identifies, in ordinary language, the key types of change (points where value is generated), and the relevant "valuable behaviors" sought from managers and line workers executing their roles in the knowledge-worker mode.

Aside from confidential facts, the most privileged type of information is ideas. Speaking broadly, we can say that an "idea" is a proposed condition with an expected meaning. Left to its own devices, the "k-worker" (knowledgeworker) profile is about managing ideas for specific circumstances. As shown in the table, that relatively "pure" focus is pulled to different pragmatic effects by the role that uses it (manager or production line worker). That said, for most companies relevant to this discussion, a prescribed business process is the production line of importance that "manufactures" the necessary deliverables from the organization.

Posted by Malcolm Ryder at 12:30 PM | Comments (0) | TrackBack

August 5, 2006

Fear and Loathing, well, Mainly Fear, in the Garden of Good and Evil

(filed under "Customer Relationship Management")

Rose Hill Cemetery, Macon, GA - Duane Allman -- who in the 1970's made the south rise again by, more or less in this order, sliding an empty glass Coricidin bottle around on skinny metal cables, becoming a god, and dying under his motorcycle at age 24 -- spit out his peach last month at the news that the hit southern country classic "Blue Sky", by his not-dead-yet bandmate Dicky Betts, has become the national television theme song for Menopause.com.

Duane has turned over and spit once before, when to start the new millenium the Allman brothers fired Betts, who, oh that's right, wrote stuff that ranks Number Two on the Country Music Television's poll of the top twenty Greatest Southern Rock Songs of all time.

But this new coffin flipping level of distress can be matched only by that which accompanied Ingmar Bergmann's Swedish goddess of Agony Liv Ullman dancing on tabletops in the worst movie of all time, Ross Hunter's 1973 musical atrocity "Lost Horizon", readily available through eBay "on DVD with Deleted Scenes. "

Let's hope the DVD is blank. And, the Allman Bros were way stupid after Duane died. But who do we hold responsible for the TV theme song assignment? Is no one safe?

Posted by Malcolm Ryder at 10:04 PM | Comments (0) | TrackBack

August 1, 2006

Run That By Me Again

Over at InformationWeek Daily, Alice LaPlante drops in on Microsoft's PR to add 15 minutes of infamy to MS's aging celebrity. Lamenting the news that the new Microsoft website enhances the fun for Explorer users and disses Firefox users, her excerpt of the Microsoft "12 Tenets" for ethical business conduct calls up this item :

Computer manufacturers and customers are free to add any software to PCs that run Windows. More broadly, every computer manufacturer and customer is free to install and promote any operating system, any application, and any Web service on PCs that run Windows. Ultimately, end users are free to choose which software they prefer to use.

Is there a lawyer in the house, or can we just pick someone from the fast readers' group? Does the paragraph above actually say anything that promises other manufacturers or customers the ability to use other stuff on the PC while the PC is actually running Windows?

Posted by Malcolm Ryder at 7:52 AM | Comments (0) | TrackBack

June 16, 2006

Hey, What About Me?

Deloitte Research gives us a handy path to the illustration of Clayton Christensen's disruptive innovation. On numbered page 6 of their downloadable paper, the diagram of a value gap attacked by innovation stresses the problem of improvements that are "missing the mark." In this case, customers have already decided on what their quality requirements are worth and have stopped asking for more quality.

But let's cut through the innovation buzz right away: what is vitally important is that the customer's preferences do not consist only of quality issues. The value gap arises from the "customary" product not meeting preferences well enough.

Cued by that, let's look at the issue of "profiling" the potential customer. In a highly general view, this profile should be able to account for at least a few simple things like:
- what's good for the person,
- what the person wants; and
- what the person needs.
In fact, as we cover those items from top to bottom, we earn more and more permission to take a critical place amongst the prospective customer's set of reasonable alternatives.

Prospects can make this tough to figure out, though. The sources of their apparent resistance can range from indifference to confusion, and can be passive or active.

One view on this problem comes from the question, how do we get to know the customer? Do they want us to know them? We start out not knowing them, and we're trying to get to persuade them. But in really tough instances we may have to solve problems ranging from their anonymity (versus our knowing how to find them), on through these:
- their secrecy (versus our knowing what's good for them);
- their privacy (versus our knowing what they want); and
- their security (versus our knowing what they need).

It is an unusual list, but the items are related by the idea that the prospective customer is actually taking some risk by getting discovered or exposed, in which case they will psychologically work to minimize that risk. Offbeat?

Maybe, but not so much. This corresponds to our real-life experience in which being pigeonholed by others reduces our ability to get what we really want. In effect, other parties are actually competing with us for the right to define our identity.

My real point: the notion of risk is significant to the notion of preferences. Furthermore, preferences are critical to the notion of identity.For us suppliers/marketers, then, the underlying principle in engaging the prospect is to get the prospect's permission to "cast" them in a role that we want them to play. We'll get that permission due to preferences.

Marketing to an identity is an effort very well paved in the customer relationship management practice. Any number of references and cases are easily obtained, such as work still found online from MIT's Sloan Management Review about demographics, psychographics, and branding. This particular work brings up the idea that identity is a result of layers of multiple personalities, and furthermore that a cetain hierarchy of these layers may be persistent for one prospect -- although not consistent across more than a small percentage of many prospects.

What is going on in these layers or hierarchies? Maslow's Hierarchy of Needs has long given us a representation that proved very helpful in taking the prospect's temprature and generating some segmentation of general populations. But the most interesting twist on that view is that people are not fundamentally "rational" in their behavior, and they might for example routinely prioritize entertainment over safety. Psychographics has to account for those kinds of things if it is really to be of any reliable use.

Without saying that psychographics hasn't been or isn't effective, the identity definition model that follows below takes on the hierarchical issue without needing caveats. It's not so much a hierarchy of personal progress that matters; instead it's an architecture of identity.

Agreed: the prospect's challenge is to choose who to be. The result of solving the challenge is a predisposition, and the predisposition is what the marketing initially engages.

This challenge would have little importance if the prospect had no need to be social. So a major point of what follows is that solving the challenge is done in terms of factors that affect perceived and actual relationships -- notably, comparisons of one's own identity against either (a.) the apparent identity of others or (b.) the identity that they appear to ask of you.

With that selectivity behind its pertinent factors, the following model illustrates the construction of the identity that the prospect puts into in play:

This self-construction by the prospect can range widely in nature, from being tacitly intuitive to explicitly calculated, as well as ranging from being passively conducted to aggressively.

Regardless, it starts with a prospect's self assessment of two things:
- how they want to fit in (association), and
- how they think they do fit in (accommodation).
The model here identifies association and accomodation as the two key dimensions of the "demographic". The point to remember is that the prospect is determining his/her own demographic.

The prospect then takes that demographic into the realm of immediate experiences. This happens either actually, or by the prospect's forecasting or hypothesis. The model here refers to that "realm" as the "location" . Location, which is predominantly a mental coordinate, has three interacting components:
- negotiation
- position
- status
These components have individual definitions, but right away lets point at what they mean to the prospect:
- association (how I want to fit in) is a result of balancing negotiation and position.
- accommodation (how I think I do fit in) is a result of balancing position and status.
- I need to have my sense of association and of accommodation be compatible with each other.

Now, to get to the particular definition of the components, first note the central role of "position". Position is the product of current goals versus current constraints. Goals may be determined by some decision calculus related to a value system such as ambition, competition, or morals. But goals can be highly sensitive to the situation at hand. Meanwhile, constraints are defacto limitations or dependencies that exist in the way current circumstances are arranged, especially when imposed by other parties or by natural laws. Since both goals and constraints change all the time, the position in the current moment may or may not be reasonably similar to the last time we checked.

Next let's look at "negotiation". What gets negotiated is deviation versus tolerance. Deviation refers to rules, while tolerance refers to expectations (or as some put it, mental models). It doesn't matter yet whether the rules at hand are synthetic (contrived, arbitrary) or natural (circumstantial, self-evident), but moreso whether they seem inevitable. Meanwhile, expectations build up from the impact of actual experiences, so their strength is subject to the influence of new impacts even if the current strength is high. Deviation from rules is a possibility, but the amount of deviation is often bound up in the attractiveness of some imagination or ethic. And tolerance framed by expectations can set boundaries around sensitivity and acceptance -- but those boundaries may be flexible because of changing expectations. Balancing deviation and tolerance often produces what we commonly see as the main signs of differentiation or character-type.

The third component of location is "status", which in this model is a component still under study. But to date it refers to the prospect's environment and particularly to the fit in the environment. Generally, this pertains to the actual external circumstances in which the prospect is having current experiences, as opposed to the more internal mental coordinates of position and negotiation. The common form of this status crosses the mind as, for example, a sense of whether "I belong here" or whether "I'm in good shape here". We anticipate that statuswill also break out into at least two factors, not just to environment -- or that "environment" is the placeholder for a pair of more precise items -- but for now we have enough of a working distinction, and we note that environment can change a lot or a little, depending on at least the prospect's mobility, obligations and luck...

All of the items to which the "location" components refer are what this model calls "conditions".

As seen in the diagram, the prospect's overall predisposition is formed from the way that conditions determine location, which in turn determines the demographic and finally the identity.

The prospect faces the world in terms of those conditions. The conditions posed to the world are dynamically establishing themselves all the time, both separately and against each other. As described above, these dynamics are what the model calls "governors", and it is the governors that comprise the likely interaction with the world. This is, in other words, the "interface" that the prospect has with the world. Typical influences are on one side of the interface; while on the other side, underneath that interface, the derivation of identity is constantly being repeated to generate the prospect's likely response.

In the big picture, the model describes what goes on between (at bottom) the sense of identity that the prospect is forming or maintaining, and (at top) the typical influences that everyone might suspect surrounds them. From bottom to top, the prospect does not decompose an identity to figure out how to face the world; instead, this hierarchy of states is all there all the time, and the typical influences are running the pathways that derive the prospect's sense of identity in the moment.

For influencers working on prospects, there are many types of influence -- from (at top) authority to features -- thus there are many ways to try to "form" a prospect's momentary identity for more correspondence to the influencer's agenda.

It can be important for the influencer to understand things lower in the hierarchy to be more quickly effective. Remember the basic tension:
- how they want to fit in (association), and
- how they think they do fit in (accommodation).

For example, if the prospect thinks "I look good in yellow, but the group that I want to belong in thinks that red is cool", then the prospect is trying to balance association (red) and accommodation (yellow). The prospect has to gauge, "what's my risk of not embracing red, versus my opportunity to get away with yellow?"

Or what if it is important to the prospect to NOT be associated with a group that likes red (accommodation)? Then a preference for "not red" can become highly activated, leaving plenty of identity room for deviation from the norm (association). This is a scenario that, in revolving around a change of goal, relates to the popular notion of the "tipping point", in which rapid adoption of a new standard takes place when an early instance of the new standard proves to satisfy a preference of either unusual or previously unsuspected importance, AND the environment proves to be a reliable supplier of more instances. Put that way, it is easy to recognize that tipping points and disruptive innovations both address the value gap between what is customarily offered and what is actually preferred.

[This article developed from related studies of dynamics in behavioral economics and complexity theory, which other articles at Archestra will eventually discuss with links to this one.]

Posted by Malcolm Ryder at 9:06 AM | Comments (0) | TrackBack

May 28, 2006

Broad Friggin Daylight in the Garden of Good and Evil

Posted by Malcolm Ryder at 7:20 AM | Comments (0) | TrackBack

February 21, 2006

Culture as Brand

Here's a thought: large companies have the problem of peering into the crystal ball, while small companies have the problem of functioning in a fishbowl.

What does that mean? Large companies act like they are picking the market; small companies act like the market is picking them. Both cases, tough situations for them to handle.

Ironically, the lip-service in each case is usually reversed. At least when these companies are facing their funders, large companies talk about being picked, and small companies talk about doing the picking. Interesting how things switch when the issue is asking for money instead of taking it.

Thinking of the small start-ups and non-profits that I've worked with (not exclusively!) over the years, I'm reminded that both of them frequently struggle with another interesting choice. They might have multiple value propositions riding on the same competency, or they might have only one value prop that anyone cares about, and must shift amongst multiple competencies in order to continue delivering the goods. My experience with them is that the more the outfit needs money, the more it sends multiple competencies at one value prop -- whilst the more it already has money, the more it imagines that one competency is wonderfully fertile. This is related to the market targeting issue, but it's more directly concerned with competing after the targeting has been done.

Related to that, I notice that we usually try to imagine branding as being a cause versus being an effect. That is, if brand is what we want buyers to think we think we're about, how do we make the many things that we do cause them to see us one way? Or are we simply at the mercy of whatever random things they do to see us?

Mulling over branding a few years back, and thinking about companies that can't see themselves the way customers see them, I hit a point regarding the vast difference between "positioning" and "position" -- hardly a new topic. I suddenly had the thought that to close the gap, the real purpose of a business is to create customers, while the purpose of a customer is to create products.

The realization came from an imaginary dialogue:

Company: "I'm doing this *for You*
Prospect: "Yes, but are you doing it *this way* ?"
Company: "Well, what do I get if I do?"
Prospect: "You get *me*..."

Think about how persuasive it is to be able to tell an audience what kind of customer you make -- which is what we can think of as the "cause" aspect of branding. Prospects would say "I want to be like your other customers" and so the reputation helps you to make more customers. (Good positioning!)

The "effect" aspect is more about the product (or likewise service) that actually gets made. Although the catalyst for the product is the customer, the bottom line is that the company winds up making the product for itself and finding out later if it's good enough to sell. Prospects say "I require something of a certain type" and their scrutiny of your product/service ranks you (leaves you) somewhere in their consciousness. (Position, for better or worse.)

At any rate, those thoughts boil down to the idea that the prospect defines the opportunity by expressing their *preference*, so you market to the preference. Moreso, as savvy salespeople know, the preference reflects an "assumed identity", and the same prospect could turn into several different customers.

Putting it in the context of revenue growth through superior competition, such differences seem to point at segmentation. It's quite interesting to imagine that one given potential buyer might be a customer simultaneously in different segments, but this is something to think about especially in terms of what customer relationship management must address. Frankly, it must address culture -- which is the empirical evidence that the prospect's multiple personalities make sense to them...

Posted by Malcolm Ryder at 1:53 PM | Comments (0) | TrackBack

November 11, 2005

Needs Are Not Requirements - A Failed Romance

This week, as in many others, our customary readings intersected in a question of whether business is the best way for customers to get what they need. Answer: maybe not!

In a handy coincidence, Joshua Greenbaum wrote that customers hate their software vendors, while Richard Snow wrote that vendors don't understand their customers.

It might be said that customers pay for a satisfying relationship without having the wherewithal to manage the relationship successfully. Here we have to separate the idea that the customer gets what they demand from that of their getting what they want. A lack of customer satisfaction is about needs, while getting what they are entitled to is about requirements. Unfortunately, needs and requirements are two different things.

Posted by Malcolm Ryder at 8:15 AM | Comments (0)