March 30, 2007
What happens to large enterprise software vendors as the workplace becomes "atomized"?
Reading Jim's post and reflecting on two conversations I had this morning - one with a relatively senior person at a major financial institution who told me that the biggest barrier to adoption for enterprise 2.0 tools in his company may be the fear of a flatter organization, another one with a sales rep from one of the two largest enterprise software companies who was trying to convince me that they now cater to companies like ours, with 2 people, a goldfish, and a virtual network of freelancers - got me thinking about the long term prognosis for large companies in general and the fate of large enterprise software companies in the face of an increasingly "atomized" workplace, or as FAST company said in a recent article - a world of a billion single-person enterprises.
I know...as Larry Keeley says, we always overestimate the amount of change in the short term, but we also underestimate the amount of the change in the long term. I wonder how many large enterprise software companies are thinking about this future...or how many large companies in general for that matter.
WARNING - big changes ahead...
March 29, 2007
Perceived quality loss lags actual quality loss by years
New research published in the latest issue of the Harvard Business Review (available for free here) shows that changes in product quality do not immediately get perceived as such by customers - in fact it can take years for perceptions to catch up with actual changes.
The study, which covered 241 products in 46 categories over a period of 12 years, and which involved over 30,000 consumers, found that most of the perception catch-up happens after the second year following the quality change. Full adjustment to the changes takes 5 to 7 years. Those numbers vary depending on the brand, frequency and purchase and other factors, but even with products where consumers were quick to gauge the change, like toothpaste, it took 3.9 years.
This has some far reaching implications. Not only does it explain other research that shows that it takes 5 to 10 years for product quality improvements to result in higher profits, it also means that companies have a long time to course-correct when something bad happens with their product (assuming they do not get hammered in the blogosphere that is).
March 27, 2007
When it becomes too personal
I wanted to use this personal blog to wish her well and tell her that many people hope that she writes again in the near future!
Think beyond the product itself when identifying customer needs
Many products in the marketplace have reached or surpassed their functionality saturation point - that point where new features largely go unused and are no longer used as a competitive differentiator. Phones, many software applications, copiers, watches, cars, baby products and many other product categories have reached that point.
When trying to uncover customer needs for those product categories, product managers need to think beyond the product itself because it isn't the product itself that customers are buying anymore.
Take cell phones - some people are buying and using them as ultra-lightweight computing devices, comparing them to small notebooks when making a buying decision. Others are buying them as a fashion statement. In both cases it's not the phone needs that will lead to successful new products, it's all about understanding the current fashion trends and a user's mobile computing needs .
Or take the copier market - most copiers will have the same feature set as most other copiers in that price range and most will have a similar lifespan and lifetime maintenance cost. A small business owner may make her buying decision based on the financing options and upgrade plans that are available - in essence turning the copier selection and buying process into a financial product selection and buying process.
And how many people do you think buy baby products for their "product" features? Most are basing their decisions on safety factors - essentially buying safety products with a twist of fashion.
When looking around at product offerings in these categories, there is evidence that some companies are getting it. But there is also a ton of evidence that many product managers are still operating in the dark ages of "feature-itis."
March 26, 2007
Launching another group blog - on health care
This weekend was a very busy one as we prepared to soft launch another group blog - this one on the Future of Health care and as a companion blog to the European World Healthcare Congress which is currently taking place in Barcelona.
Suggestions & comments are welcome!
A world without the 30 second spot or the glossy spread?
Bob Garfield's Chaos Scenario 2.0 is a great read in the online section of AdAge today.
Interrupt marketing is dead! Traditional media and traditional advertisers are locked into a death spiral...word of mouth and social networking are in...agencies are out...
March 23, 2007
Second Lifers Unhappy with Brands
A new survey of Second Lifers found that 72% of the respondents expressed themselves as being disappointed with the activities of companies in Second Life. More than one third of them had no clue that brands were even present in Second Life and 42% thought they constituted a short term trend. Just 7% consider that it has a positive influence on brand image and their future buying behaviour.
Interestingly enough, the most positively judged were brands from industries such as hotels and retail, companies which already have significant experience of location and experience marketing gained in the real world.
(via MIT Advertising Lab]
links for 2007-03-23
Does anyone read these artices? The more you invest in your employees the bigger the return...amazing how few companies follow these best practices
March 22, 2007
Innovation: do not forget to pay employees for their ideas!
The latest issue of Harvard Business Review has a cool forethought on innovation titled "$152,000 for your thought" (not online yet and requires subscription).
What the authors found is that the average employee reward to savings or increased revenue from innovation ratio is about .001% or $100 for a $10 million idea. The result is a very broken idea generation process in most companies. The authors suggest that companies raise the bar and require employees to prove and document the viability of their ideas in return for much richer rewards - as much as 50% of the first year's savings or increased revenue. Doing so can significantly increase the number of workable innovations - they found by as much as 20-40%.
The story that led to the title of the article is that of a $38,000 executive assistant at a consulting company who came up with an idea that saved the company $304,000 and walked away with a $152,000 bonus.
links for 2007-03-22
Interesting SEO article for blogs
March 21, 2007
The lessons from politics
The political world keeps bringing us interesting lessons in strategy and communications. Take the latest 1984 Clinton attack ad on YouTube as an example:
Who is trying to change the playing field, or the "relative value" of the players in this game? Is it truly an outside amateur, or one of the two players in questions, or a third player from within the democratic field or the republican field?
Also interesting to see how it took almost 10 days to get picked up by the mainstream media...diffusion of ideas at work...now with almost 1.5M views.
[03/23 update] The culprit was a designer who worked at the firm that designed the Obama web site
links for 2007-03-21
Three webisodes on life in Bagdad
March 20, 2007
Is the end of the hierarchical organization in sight?
The latest issue of FAST company has an interesting article on how the traditional business organization is meeting democracy and how that could radically transform the way we think of enterprises in the future.
It's not a new notion - the idea of the "externalized" project-based organization and talk about the impact of the disappearance of friction in communication, cooperation and collaboration on traditional corporate business models and the power that goes with it have been around for a long time. It has become an agreed upon fact that in this interconnected world, size and scale of an organization no longer ensure viability. The notion that only large companies have enough resources to market their products to mass markets of consumers, and to fund serious scientific research, has been shattered for a long time. According to the article, recent scientific breakthroughs in the area of nanotechnology may now break one of last remaining reasons for large companies to exist - namely that they are the only ones having enough capital to build and run manufacturing plants. Heck, even Caterpillar now thinks of itself as an "intellectual property company!"
So are we moving towards a world of a billion single-person enterprises? Probably not soon enough...
March 19, 2007
Marketing shift: from 'one->to->many' to 'many<->to<->one'
At last week's Community 2.0 conference, an interesting discussion developed after John Hagel's keynote address, in which he said that customers do not want 1:1 marketing, but that they instead want to be put in touch with many connections and resources.
In a way, that is like describing marketing evolution from the one->to->many, to the 1<->to<->1 to the many<->to<->one, with the vendor having the opportunity to facilitate the connections between customers and other people and resources - also called community building. Despite a wave of excitement about the potential of 1to1 marketing in the 90's, popularized by the success of the One to One books by Rogers and Peppers, one attendee argued that we were never able to successfully achieve 1to1 and that therefore many-to-one may be an elusive goal as well.
But is this true? Is this truly an evolutionary process in which we cannot skip a step until the previous one is complete? Or did we missread the need for many-to-one as the need for one-to-one and launched on another marketing fad that never materialized? Could community-based marketing be like that as well?
It could be argued that this time we are dealing with the genuine article - and that some companies have known that for a very long time - skipping the 1to1 marketing wave all together in favor of many<->to<->one, and in the process reaping tremendous competitive advantages (note the bi-directionality of the arrows - a key ingredient to make it work!).
What do you think? Community-based marketing: another fad or a real competitive differentiator?
March 16, 2007
Back from the Community 2.0 conference
I just got back from the Community 2.0 conference, for which I organized and managed the program. We had almost 70 speakers, moderators and provocateurs - but as expected, some of the most interesting ideas and thoughts did not come from the stage but from the rich discussions and interactions on the future of communities that everyone was having from morning to night.
In hindsight the Community 2.0 moniker was a good one. Many attendees who had been been part of the first business community wave - the one a decade or more ago, which did not materialize - were seeing signs that this wave was much more real, and based on vastly different motivations. An informal poll showed that more than 60% of the audience was already involved with running and integrating communities as part of their business. As one attendee said during a "panel from the audience" session - when a competitor starts competing by leveraging communities, you have no choice but to respond by leveraging communities yourself. At this point the effects of successful community management are game-changing, not level-setting.
I will post additional feedback from the conference on the Future of Communities blog as well as summarize what is happening with the new community association on the CMMC blog. I will also return to a more regular blogging schedule on this blog, with many fresh thoughts on marketing and innovation.
March 6, 2007
links for 2007-03-06
Online communities around gaming
Papers by Prof Resnick on reputation systems, increasing contributions in virtual communities by showing the value of contributions and more
Interesting list of people who have expertise in building social networks and online communities