General Electric Corporation’s announcement that it was moving its headquarters to Boston is big news for Boston and the region. Long known as a center for technology innovation in computers, health and life sciences, communications (Internet got going here as well as elsewhere, that’s the nature of a network) oh, and robotics, with world-class research institutions like Harvard and MIT, the decision has given Boston a new life reversing a trend of corporate departures many through acquisition. Dell is buying EMC, Digital, DG, and the other mini-computer companies are gone.
The Boston area last bloomed in the 1970’s and 1980’s as the center of the mini-computer revolution but all of these companies are gone as is the mini-computer but the infrastructure of technology innovation goes back at least to Alexander Graham Bell and the telephone, Samuel Morse an inventor of the telegraph and Morse code (a decent painter too) and many others. The first surgery with ether happened here too.
GE is coming to Boston because it wants to be a major player in the Internet of Things or what this New York Times article referred to as the industrial Internet. Good for them. Having GE here will re-energize the local economy and tap into some very bright minds, not just in engineering but in many other fields like medicine. As is typical, I’d expect a large community of spin-off companies to emerge and to need venture funding which will tap into another one of the area’s natural strengths. I also expect many Silicon Valley companies to start or beef up their presences here just because.
GE’s presence will also change Boston in unpredictable ways. Will the industrial Internet overtake biotech? Will the local software industry thrive or will it be supplanted by another wave of hardware builders? Where will people live and what will the influx of more talent and capital do to real estate prices? Will Cambridge, a hip enclave in the metro region come to resemble Palo Alto more? Who knows?
Last summer the voters put their collective foot down over hosting an upcoming summer Olympics. It was mostly due to the high projected costs and the IOC’s demand that the city and state backstop any cost overruns. When it was over Boston was a bit bruised and the Boston Globe putting what seemed like a brave face on the disaster at the time said, that’s Okay, we’re Boston, we cure cancer, we don’t host track meets. At the time it was cold comfort, today not so much.
In a sure sign of the times, Google announced its new holding company, Alphabet, today. Alphabet will now be parent of the search business as well as all of the other businesses like drones, android, self-driving cars, wearables, and so much more. The switch helps Google become more transparent for Wall Street while setting up the company as a first class innovation conglomerate. An article in the New York Times makes the point (several times) that by setting up Alphabet, Google is emulating General Electric or even Berkshire Hathaway, Warren Buffet’s outfit that is into everything from tighty whities (Fruit of the Loom) to manufacturing, retail companies and a lot more.
Emulating either company is not a bad way to go. Since its founding in 1892 by Thomas Edison, GE has been a powerhouse of innovation in such far flung areas as medicine and healthcare, locomotives, jet engines, and a host of smaller goods that influence the lives of nearly all Americans. What GE has been (and this in no way writes off GE as a future innovator) in all of these areas, Alphabet has a chance to be in new fields during the century ahead.
Unlike Microsoft, which has remained a single entity, Alphabet will spin-up and spin-off wholly owned entities with a singular purpose that enables Google’s founders to engage in their interests in creating new companies, products, and business models while more or less insulating the cash cow from the vicissitudes of a large and possibly chaotic single company. The single company model sets up all kinds of political rivalries for resources and it saps the strength of even the best leaders.
What links GE, Alphabet, Berkshire Hathaway and many others is a Blue Ocean strategy. This approach enables leaders to be bold speculators about the future and the make products and services that fit their visions. Since many or even most bets on the future fall short, there’s a high amount of risk associated with attempting to sail on the blue sea, but when an idea works it is often game changing and paradigm building. If you think about it, Google Glass and self-driving cars define the spectrum.
All this brings to mind Salesforce.com, another company that I have said many times has a blue ocean orientation. Salesforce is tiny compared to GE or Berkshire Hathaway but those companies were small once too. So far, Salesforce has stuck relatively to its knitting building software for business. But if you look at what it is involved in from its verticals to its partners to wearables to its platform-based approach, you can see the potential makings of another GE or Alphabet, though one that is solidly focused on software, at least for the time being.
The rise of Alphabet and the emerging prevalence of blue ocean thinking suggests to me that we are at a transition point. We’re shifting from an economic paradigm focused on information and ramping up a new one that applies digital technology to many more challenges than how to rapidly store and retrieve data.
Humanity faces a long list of challenges today that will benefit from a more aggressive and engineering based approach to problem solving. Engineering is not a panacea but it is amazing how many challenges can be addressed when we start with engineering based approaches. With GE as a model, it will be interesting to see what Alphabet does next.
The overall impression I got was that modern, statistical and analytic marketing is still in its early phase though few people I know need to be convinced about its usefulness and efficacy. You could see evidence for this belief in the products and product introductions, the breakouts, and in the speeches.
First the speeches. In addition to CEO Phil Fernandez’s keynotes there were appearances by Democratic presidential front-runner, Hillary Clinton and GE’s powerhouse CMO, Beth Comstock. Each woman’s appeal to the largely female audience was obvious. They are role models for many and an inspiration for any woman wanting to climb the greased rope of corporate success. Each spoke about the challenges of being a woman in business today but I thought Comstock came closest to the mark when in the context of marketing she said that sometimes you simply need to give yourself agency to try something. That’s an avenue not as easily exploited in politics where as Clinton pointed out consensus building is important and sadly absent today.
The theme of the event was innovation and while Clinton, who spoke on Day 1, is no technology expert and not a marketing professional, her vast practical experience in modernizing the State Department by embracing the Internet and social media and her knowledge of how to sell an idea, which was honed in decades in the political arena, provided a great foundation for discussing innovation in a broader, national context. Clinton’s message concentrating on the truth that we are all people and that we need to coexist was not lost on the men in the audience either.
Comstock spoke on the second day and gave a more focused discourse on what it means to be a modern marketer in one of the largest, most innovative, and geekiest corporations on the planet. Her message was that marketing has to take the lead in inventing itself, to find markets and opportunities for innovation in order to take its rightful seat at the boardroom table. She told of instances in GE’s diverse portfolio from jet engines, to locomotives, power systems, and healthcare where marketing found product opportunities and developed markets for them. The keys to success — and there were several — included bringing business ideas where marketing can quantify results and not simply existing to produce content, a message well in line with Marketo’s ideas about marketing.
At the keynote level, Fernandez allowed himself a brief moment on stage to take in the company’s success symbolized by the throng in the hall. The company introduced new and improved products for calendaring, SEO optimization, and personalization, all of which are in demand as building blocks of modern marketing. Fernandez also hammered on the continuing need for innovation in all things marketing related as companies continue to face great challenges driven by the pace of business and the ferocity of competition.
When it got to the breakouts, and I didn’t go to all of them, the vibe seemed to be how to help marketers to do more than adopt the basics and to exploit the breadth and depth of marketing automation. This is no surprise for any breakout session but for a still new market that is past its early doubters but still gaining altitude in the executive suite, the sessions offered practical advice for things tangential to marketing such as how to work better with sales. There is a great thirst for this kind of knowledge and knowhow among marketers.
Especially illuminating to me was the amount of discussion about marketing’s interface with sales and for me this was troubling, not for marketing but for sales. Of all the disciplines in CRM today, sales appears to me to be the one that has changed least over time and that’s not good. Sales is the practice area least affected by CRM, where people are still allowed to fly by the seat of their collective pants.
I say this not to be provocative but to bring together several threads. First, the urban myth that sales force automation does not work refuses to die, second, according to CSO Insights, half of all organizations surveyed still don’t have a recognizable and implemented sales process. Third, and perhaps most troubling to me, too often the discussion between marketers has turned to questions of how can we effectively work around sales if it insists on its recalcitrant ways? Too much of marketing automation’s effort seems to be in devising ways to capture customer data that provides the feedback that sales ought to be giving. At least that’s what I saw.
My concern for sales is that it will remain stuck in its rut too long and that market forces like the automation provided by ecommerce and subscription sites augmented by the information flow provided by marketing, will serve to make selling and its practitioners redundant. As markets and categories mature a certain amount of retail-ization of the sales function is inevitable. However, sales people who are still avoiding formalized processes and technology are making the inevitable too easy.
The sales function was not on trial at the Marketo event but as an analyst I routinely look at what is and wonder how it will evolve and my conclusion left me wondering about the future of selling.