Verizon's OPEN for Business

Verizon’s leap into opening the use of their cell phone software to other companies is the result of a slow recognition of what Bill Gates’ Microsoft learned several decades ago. Gates was leapfrogging before the term came into use! Verizon saw the benefits of being open with their strategy.

They took the ritual of the industry’s slow evolution of thinking beyond the boundaries of organizational resources, product and core competence hugging plus the willingness to tolerate what appeared to be greater risk by experimenting with outsourcing and open sourcing before some of the behemoths of the industry.

There are of course always multiple factors that contribute to the kind of strategic decision Verizon has made. Certainly one factor is that it is often cheaper to buy hardware than to manufacture it given today’s manufacturing processes and low cost global labor. This is not far from the long-time practice of leasing facilities and equipment rather than buying, which leaves greater cash available for marketing, sales, research, innovation, application and service – to name a few, and of course much greater flexibility to move quickly. 

In addition, advancing technology now allows the integration of many applications into one small piece of hardware such as the cell phone. As Gate’s has proven, the opportunity cost of limiting software design and application to the hardware a company uses limits opportunity to sell what all customers want…to combine the features we think are best for our own particular use. Verizon’s decision expands their market opportunity by creating software and services that can be used by millions more customers.

It would not surprise me that a major contributor to Verizon’s decision was information they gathered through Social Network Analysis. By this decision alone, Verizon has opened their SNA opportunities to collaborate, learn, innovate, and expand their market presence, as well as reduced the constraints of hugging on to the limitations of their own equipment. Further, Verizon may now leverage and enhance their software applications based on the advanced hardware features of their new clients. Certainly an incentive to their clients will be their ability to use Verizon’s great transmission networks.

In the end, we will see more of this type of strategic decision making as the years go by, and at a much greater pace. We are just beginning to share knowledge and integrate that shared knowledge. Probably in the industrial age when things were slower and changes held static for decades it was wise not to share. However, that is a counter productive way of thinking and acting at the pace we work today. The sooner a company realizes the benefits of SNA and the advantage of being open to collaborative endeavors the sooner they will find that the risk is in not being open for business.

~ Bill Becker, Principal
Axelrod Becker Consulting

Target: "Creative Chic" & Partnerships

While there's no Target store in my neighborhood I do know Smith & Hawken as a high end speciality retailer so what a surprize discovering through a New York Times advertising insert this weekend the two companies are partners.  A January 2006 Target press release describes the partnership.  Casual Living, a Reed Business site reveals the arrangement dates to 2005.

Target's brand differentiation and design partnerships already gained attention from Harvard Business School's Working Knowledge in 2004:

"Target's outside-the-box strategy made it the No. 2 discounter behind you-know-who. "Tar-zhay's" success is examined in this excerpt from the new book Simply Better, from Harvard Business School Press."
describing how:
"In 2002 the Minneapolis-based Target Corporation leapfrogged Kmart to become the United States's second-biggest discounter behind the $218 billion giant Wal-Mart."
and the strategic decisionmaking that lead to it's ascendance with the "cheap chic" positioning:

"The first choice would have thwarted future growth, and Wal-Mart was already a low-cost producer, so Target chose the third option and decided to reposition itself as a mass merchandiser of affordable chic goods."

Target's name as an innovator was on my mind having heard from fellow Australian and PRODIGY alum Kirsty Hamilton during a recent New York City visit that Target Australia was distributing a line of clothing by Stella McCartney. (A post to an Adelaide Now blog suggests that launch gained unintended news coverage.)

Regardless, a 5 year TGT stock chart indicates Target's creative partnerships strategy with high end designers and established brands continues to work. And the Kodak Gallery deal today reveals the partnering continues. Evidence for the wisdom of Ranjay Gulati's presentation to the November 4 2004 Network Roundtable on "Realizing the Value of Networks Outside Organizations" through expanded external relationships. I wonder how Target keeps the creativity alive.

~ Jenny Ambrozek

Listening to the Customer: FT Book Review

Interesting Financial Times review today of "Hidden in Plain Sight: How to find and execute your company's next big growth strategy" by Erich Joachimsthaler, Harvard Business School Press.

Extracts examples of companies perceived as effective listeners, including Apple for the IPOD, Mastercard and Frito Lay (for advertising and branding,) and State Street's transition to focus on providing financial information. Story of UK based Tesco's efforts to enter the grocery market in California describes what the process of listening to customers can entail.

Jonathan Birchall, the reviewer in closing suggests that while a "fascinating tour around the global block on innovation" the book would have been "more exciting to read" before the widespread awareness of AG Lafley and Jim Stengal's focus on rethinking innovation with toothpaste at Procter and Gamble starting in 2000, or GE's Jeff Immelt's resurrecting the post of "chief marketing officer", "appointing Beth Comstock who had worked on identifiying the needs of customers in 10 year's time".

Book listed as not yet available on Amazon.

~ Jenny Ambrozek

Life beyond "Second Life" - The Metaverse Earns an "Intraverse"

Being a tech vet comes with certain disadvantages. Sure, there is the sense of history that makes imagining the future possible, but there is also the whole "been there, done that" mindset whose cynicism blinds you to that big box under your nose with "NOW" printed in big block letters along the side.

Last week, friends, I had such a moment. A client was in town for the first-annual Virtual Worlds 2007 conference, and I was dutifully preparing for the usual round of schmoozing and media wrangling when something totally unexpected happened: A smack, a well-aimed and apparently well-deserved smack that wiped that Web 1.0 smirk right off my face.

The realization? That the 3D Web, known as the "metaverse" to the kiddies, is the cat's iPod, and not for all the hyped-about reasons.

Alongside the scads of press about the newest mall to be erected in Second Life or the latest celeb to take his/her first 1995-style baby steps across the only real estate that seems to be going up these days came the news that companies are using worlds like Second Life for much more than branding and the distribution of virtual goodie bags to the day-glo, griefing citizenry.

ProtonMedia, for one, leases portions of its 3D world to pharmaceutical and insurance companies to train their reps, a world that comes complete with real-time whiteboarding in 3D classrooms and the ability to share Office docs on the fly. On a related note, there's also Forterra Systems, a company that also works with big corporations, but whose mainstay is training for emergency services and homeland security personnel.

How useful. And completely and utterly useful. And what a wonderful reminder of why I got into this business in the first place. Oh, and lest I be accused to not keeping abreast of the latest jargon, there's even a buzzword for this sort of thing. They call it the "intraverse" - you know, like the love child of "intranet" and "metaverse."

Anyhow, there it is, friends. The cynic has been shown his true nature - the optimist in disguise. And now, if you'll excuse me, it's time for me to get back to perfecting my Barack Obama avatar in the hope that his meatspace equivalent decides to do some 3D campaigning.

~ Bill Lessard

Bill Lessard is President and Creative Director of NYC-based PR boutique PRwithBrains; and with Steve Baldwin, is co-author of NetSlaves and NetSlaves 2.0. Bill has also contributed to NPR, Wired News, the San Francisco Chronicle and the dearly departed Industry Standard. When not talking to reporters, he can be found in pitched frag-fests in his favorite first-person shooters or wondering why the poetry in the New Yorker is so bad.

McDonalds & Starbucks: Arenas for Cola & Music Industries Change

Via today's Wall Street Journal's Morning Brief two stories making clear the tight knot between organizational and industry changes:

1. Advertising Age  March 12, 2007
Kate MacArthur in a story titled Pepsi Gains Toehold in Coke Stronghold writes:

CHICAGO (AdAge.com) -- The new ground zero in the beverage wars: McDonald's. While restaurants traditionally sell either Coca-Cola or Pepsi-Cola, the burger baron is breaking new ground by testing a program that allows consumers to choose among brands from both companies at some outlets. The 10-month-old initiative is doing so well it's being expanded to at least one new market-Wichita,..

2. New York Post, March 11, 2007

Peter Lauria in "Let it Bean" reports:

-- Having already proven that it can sell other companies' music, coffee giant Starbucks is planning to launch its own record label and is close to a deal for the next album from former Beatle Sir Paul McCartney to be its first release, according to sources familiar with the plans

~Jenny Ambrozek

 

Doing business in Second Life conversation with Bill Lessard: Digital goodie bags, street teams & universal identity with avatar

A take away from the Internet Strategy Forum's Second Life presentation was not "if" but "when" an open source alternative platform would emerge to compete with Linden Lab's environment.

In light of that prospect I appreciated my conversation today with PRODIGY alum and absolutely PRwithBrains President Bill Lessard about his experience and insights working with clients striving to create buzz through Second Life promotion.

Bill's take on Second Life today:

"the 3D equivalent of what AOL was in it's day.  It's a proprietary iteration of a future aspect of the World Wide Web. Just as PRODIGY and AOL rolled up all the tools for the Internet and put them in a nice safe proprietary package."

Bill also pointed out that unlike development of the Internet, Second Life protocols are not open source. Not HTML. This puts leading developers like The Electric Sheep Company in a powerful position at the moment especially since their $5m investment from CBS.

As a PR guy who's seen traditional PR strategies, Bill is impressed by the buzz-building capabilities of virtual goodie bags and digital street teams. But, as a tech veteran, he's more excited by what the future holds. Bill makes the case for using Second Life for customer service, especially for demonstrating how to assemble computers, electronic devices. Better than step-by-step instructions over the phone.

More interesting to Bill is what the future might hold. He's looking for the ubiquitous avatar, a set online identity, look and a feel complete with a little digital wallet, that can chat using voice and video and through a phone.  In Bill's words:   

"Imagine avatars on your phones keyed to a different ring tone."

Interesting but how far off?  Last December I attended the opening session of the  Internet Identity Workshop at the Computer Museum, MountainView.  A room full of very smart people focused like Paul Trevithick, The Higgins Project on developing an open source platform to put identity control back in the hands of the individual who owns it. I was struck by Paul's statement that on average an individual has pieces of their personal data sitting in 700 databases that others control.

My sense is the IIW has some work do before the universal identity with avatar emerges but no doubt somebody out there is busy working on it. Anyone?

~ Jenny Ambrozek

How are people 2.0-ing?

Thursday, November 30, 2006 2:18:19 PM

Today Robert Scoble links to this technology-out view of Web2.0 applications from Don Dodge. Ross Mayfield (my go-to guy for a more nuanced view of how wikis are influencing business (and vice-versa)) also gives Dodge a mention. I like this quick summary and the basic conclusion. But I want to see the "people-" and "work practice-"in view.

Specifically I'd like to see Dodge's "build it and they will come" view replaced by a user oriented, participatory "let's find out what people are really doing before we build anything" approach. The build it first way definitely has it's place. Who knew we could do so much with a photocopier, or a personal sound device, before we had them? No one. However, I want to look a bit more deeply at the user and participatory practices that run through Web 2.0 visions.

As I mentioned the other day, Tim O'Reilly's What is Web 2.0? paper is mostly about the software. But nestled in there are some ideas about participation among people and a core competency that Web 2.0 companies need to have; viz., "trusting users as co-developers". What, exactly, does that look like? Fortunately, this has been done before, and we can look it up.

Co-development with users has been practiced in Scandanavia and Europe under the name "Participatory Design" (PD) since the 1970's and in the US since the late 1980's. (Computer Professionals for Social Responsibility (CPSR) is a good starting point for learning about PD and linking to PD resources.) PD grew out of sociotechnical systems and action research work in the 1950's and 1960's at the Tavistock Institute in London. Bringing social science to bear on business and management problems was a hallmark of this work. In addition, Kristen Nygaard, the inventor of the Simula object-oriented programming language, was also a major proponent to PD approaches to system development. So this key requirement for business has long roots in both technology and the humanities. Maybe, just maybe, these new internet practices will force us to appreciate the social nature of technology development and use. Maybe our adoption of the new will help us remember and bring forward the parts of the past we can use right now. I hope so.

So we're good with co-developing systems and applications with users. What does it take do this well and to be successful? Joan Greenbaum and Morten Kyng (quoted from this Kuhn and Winograd profile on PD) identify four design techniques that are based on PD:

1. The need for designers to take work practice seriously—to see the current ways that work is done as an evolved solution to a complex work situation that the designer [or programmer] only partially understands.

2. The fact that we are dealing with human actors, rather than cut-and-dried human factors—systems need to deal with users' concerns, treating them as people, rather than as performers of functions in a defined work role.

3. The idea that work tasks must be seen within their context and are therefore situated actions, whose meaning and effectiveness cannot be evaluated in isolation from the context.

4. The recognition that work is fundamentally social, involving extensive cooperation and communication.

Putting these techniques into practice requires an entirely new paradigm of software development (cf., Floyd, Reisin, & Schmidt); one that moves engineers and designers out into the workplace of the potential users, so that they can actually understand what the work entails. This knowledge can enable the development and deployment of systems and tools that really augment the work and enable the discovery of new work.

So, how's it going for "trusting users [the people in the 2.0 world] as co-developers"?.

Well, one thing to say is that more and more anthropologists, sociologists, and ethnographers are getting involved with software development companies (cf.; the anthrodesign e-mail list; interaction design; contextual design). In most cases, these people really are looking at work and work practices. They do still need to translate what they know into information that engineers and programmers can use. And this doesn't get the engineers out, but people who know how to look and how to ask can bring in key product requirements.

On the technology side, agile approaches to software development are facilitating concerted efforts to engage customers (not always the end users) directly with engineers to deliver small solutions quickly, and to refine what's needed through use. Not only is there cooperation; there's a neat division of authority and responsibility. Customers get to say what they want; developers get to say how long it will take. When this works there's lot of discussion and communication about needs and costs. However, customers and users are often represented on the engineering team by a single person. This is better than letting engineers imagine how work is done, but the details and context of the user's work practice is often lost -- it's hard for one person to know everything. Not to mention that when you hang around with engineers you eventually see the world as they do.

And, finally, on the consumer side there is a steady drumbeat (start with The Cluetrain Manifesto) to find ways to talk directly with customers; to get unfiltered feedback about how your product or service is working "in the wild". Here wikis and weblogs, etc., look like great tools. But very often I don't want to have a conversation with my vendor; I just want to buy the digital camera and start taking pictures. This participatory customer / vendor relationship seems like a great idea. But I don't know if it can capture enough of the context of my complaint or need. And I don't know if it can scale. Could conversations between every MS Word user and Microsoft even be supported? Are there enough hours in the day for that?

Even with all the questions I think it will get better for people in the 2.0 world. Definitely! And some bloggers continue to re-enforce that the web is all about people, people. That's good. It's all good.

- Bill

Burger King.. Content Based Marketing..David Graves & Rate of Change

CNBC's tagline says "you hear here it first" and their Squawkbox segment 10.30.06 indeed was the first I'd heard about the new Burger King promotion phenomenom that includes a MySpace presence, and forthcoming video game. MySpace and video games work as strategies for Burger King as they target young male demographics. Still the growing presence of traditional markets in online social networks suggests more companies trying to figure how to leverage these new venues.

Also interesting about the CNBC segment was the commentators reference to "content based" marketing. I first heard this term from new media pioneer David Graves, who's highly visible industry executive roles include Reuters New Media, Yahoo and currently PermissionTV. Dave's march from traditional media, through distributing traditional content to Internet companies, through joining an online media company (Yahoo) to video online, is an interesting review of where the media industry has been, and is going.

I vividly remember Dave telling me during a 2004 interview for an eContent Magazine article that:

"anyone who has a web site is in the content business" and

  "the new marketing is content distribution".

Two years on television commentators are discussing "content based marketing.  Thinking about how long innovations take to become mainstream I dug into the history of MySpace, not readily accessible on the MySpace site.  The Wikipedia entry indicates the domain name dates to 1998, and the MySpace that attracted $580m traditional media company Newscorp dollars was founded in 2003.

No wonder employees in organizations everywhere are overwhelmed and sleepless challenged with adapting to new technologies and helping their businesses develop new paths in this rapidly changing world.

~ Jenny Ambrozek

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