A couple of weeks ago Allison Arieff wrote a piece in the New York Times titled “Solving All the Wrong Problems” that gets to the heart of the technical times we live in and its focus is not what you might think. She includes a long list of things we can buy or subscribe to such as:
A service that sends someone to fill your car with gas.
A service that sends a valet on a scooter to you, wherever you are, to park your car.
An app that analyzes the quality of your French kissing.
A “smart” button and zipper that alerts you if your fly is down.
A sensor placed in your child’s diaper that sends you an alert when the diaper needs changing.
It goes on but you get the idea and you can always read the article here.
All of these things have in common the idea that just because we have the ability to make them doesn’t mean we should. Presumably the ones that got venture capital financing had someone asking, how does this make money and receiving an acceptable answer.
At about the same time this article ran, I needed a water heater so I went to a big box store and searched for—wait for it—someone to wait on me, to answer a few questions in other words. There were three models on display but in a perversion of good, better, best, there was standard, deluxe, and WiFi. The top of the line water heater could send information to my smartphone about, oh, I don’t know what really.
In my long life I’ve noticed that water heaters either work or they don’t. When they don’t work, I take a cold shower and summon a plumber to rectify the situation. The idea of having a water heater that I could interrogate through my smartphone seemed importantly like a moment in history when a new neurosis is proclaimed—hydrothermia gondii, perhaps.
But I have an explanation or actually two that seem to pacify my mind. The first harkens back to Linus Pauling, a two time Nobel Prize winner who once famously said that if you want to have good ideas, you need to have a lot of ideas. Translation, it’s a numbers game and most inventions don’t make the cut. Of the long list in the Times article, most if not all but the one that evaluates the quality your French kissing, are bound for history’s ash heap.
But Pauling’s point was that you never know what’s going to hit so you take the risk of ridicule and ruin for the chance of success and all that attends it. Still, some of these inventions up to an including the WiFi water heater strike me as over the top science fair faire.
The other reason in my mind might be closer to the truth. It’s that we’ve reached the end of the current paradigm. By paradigm, I mean the thing that frames our economic and social lives, the technology boom. According to the late Russian economist, Nicolai Kondratiev, a paradigm animates our economic lives and lasts between 50 and 60 years before another replaces it. Within a paradigm you can have trends and business cycles but the paradigm is ascendant.
You can know when the end is nigh because it gets really, really hard to innovate around the core tenets of the paradigm without bumping into something else that does pretty much the same thing. In other words, all of the niches are full. When that happens people try to invent niches which is why you get online water heaters and French kissing apps.
Eventually Kondratiev’s wheel turns again and we start anew with a different paradigm. But new paradigms are expensive; they result in what another economist, Joseph Schumpeter, called creative destruction in which some of the earlier and perfectly good established economic order is trashed. So, not surprisingly, the establishment will resist change which brings on a period of stasis.
You know you’re there when someone invents something equivalent to a sensor placed in your child’s diaper that sends you an alert when the diaper needs changing. Come to think of it, that’s a perfect metaphor for the times we live in. We’re waiting for change.
According to the Microsoft blog, the company has bought FantasySalesTeam, a sales gamification platform. The intent of the product is to boost sales productivity and the gaming part is designed after some aspects of fantasy sports leagues where you build a team from known professional athletes and try to beat other teams. The team aspect makes everyone more competitive and hopefully boosts everyone’s performance.
Ok, I get it but I wonder if this is the best approach to improving sales. We’re always trying to improve sales and it seems like we’re always failing while also bringing out new products that will do the job better. It reminds me of the long history of antacids. You can go back in history and know what decade it is just by peeking at the ads for cures to heartburn (Alka-seltzer, Brioschi, Peptobismol, Maalox, Tagamet, Nexxium and many others) but we still have heartburn.
If you see a pattern like this, it’s reasonable to ask if you’re just treating the symptoms and you haven’t identified the root cause. I’ll leave heartburn to the doctors. But for many years and even centuries, we have incentivized sales people with money (the carrot) and job loss (the stick). That wasn’t enough?
Every business is unique and its processes and people reflect this. In the past we’ve seen sales improvement prescriptions that include methodologies, technologies, coaching and many other things. Yet surveys of sales organizations by CSO Insights and others shows that improving management through things like having and enforcing a defined sales process with appropriate technology support does a better job.
So the gamification approach, in my mind, skirts the real issue, which is managing through incentives. Rather than gamifying anything, I think the real issue is individualizing the incentives and applying them across the whole organization and all product lines. It’s a big data problem and you can’t manage what you can’t measure. I see a pattern emerging.
By applying gamification, the hope is that sales people will be better at self-monitoring or peer-monitoring and self-management. But a version of this is already taking place and many businesses are trying to squelch it. According to the folks at Xactly, today almost every sales rep does what’s called shadow accounting—they keep a spreadsheet of their deals and calculate their commissions hoping to catch any errors that can easily happen in a manual or spreadsheet based corporate compensation system. The theory is that reps spend valuable selling time tracking their commissions and playing what-if scenarios rather than selling. This is time the fantasy engine would presumably take over.
My preferred approach is to get a real compensation management system like Xactly or possibly Callidus. You could try this with spreadsheets but one of the big problems with incentive compensation in general is that plans are too unwieldy to manage in spreadsheets or on paper and they are soon discarded. When this happens, reps fall into the path of least resistance. They sell what’s easiest, not necessarily what’s new and improved or what management wants to move.
But with a compensation management system all of the details involved with individuals, plans, territories, products, commission schedules and more are handled by the system. So it’s possible to custom design a plan and enforce it through the technology rather than relying on gamification.
Please don’t get me wrong. This idea may have legs—I am not terribly familiar with Microsoft’s new product so I don’t want to put it down. Gamification is a great tool in the right circumstances but I just don’t see how this solution solves the problem. As with antacids, if one doesn’t work you can always try another. But when that approach gets old, it’s time to look at root causes and perhaps cut back on the pepperoni pizza. In this case, you might ask if your management technique could use some spiffing up.
Sage and Salesforce put on a love fest on Tuesday to announce their partnership in which Sage has developed Sage Life, a product to enable small companies to connect their “customer, accounting, payroll and finance data into one system, accessible from any device, anywhere,” according to the press release. The wording leaves it unclear if the customer data is held in Salesforce’s traditional CRM or if it refers more broadly to ERP data. Sage Life will be out later this year and will likely be shown to the public at Sage Summit, a user meeting in New Orleans in July.
The shared press conference between CEOs Stephen Kelly of Sage and Marc Benioff, Salesforce, shed no new light on the continuing controversy over whether Salesforce was being pursued by a third party as an acquisition. For all we know Salesforce is or is not being pursued by an anonymous third party but certainly all of the likely contenders—i.e. vendors who can afford such an acquisition—have demurred when asked.
The fireside chat was held at a restaurant not far from Salesforce headquarters in San Francisco. Even if this was not the acquisition announcement many had expected, it was still certainly a news-worthy event. Sage is the second largest software company in Europe behind only SAP and the vast majority of its customers—85% according to Kelly—are still users of on-premise computing solutions to run their small businesses. This should be seen as a significant opportunity for both companies.
For Sage it is a significant upsell opportunity, albeit one that will go through its resellers. The danger for Sage is that its partners or customers will abandon the brand in favor of other cloud solutions such as NetSuite, FinancialForce, or other cloud solutions. On the other hand, Sage’s huge installed base represents a large community of potential users of Salesforce’s platform, Salesforce1 upon which Sage Life and any future products would be based.
Kelly was careful to note that he regards Sage customers as customers for life and that he wants to be their supplier into the future. It was his way of telling them that while cloud computing is the future of the industry, Sage would not be twisting arms to get its customers to upgrade. This is both good business and fine logic because it will take time to educate and motivate Sage’s existing partners to make the switch.
Still Sage Life offers many modernizations that Sage customers might gravitate towards such as its ability, thanks to Salesforce1 to integrate collaboration, social, and an array of other apps on a single handheld device. Significantly, Kelly said that the new application and its underpinnings is as important as the introduction of the iPhone for his customers.
Benioff had no comment when asked about potential acquisition rumors, a position which he, as the CEO of a publicly traded company must take to keep from running afoul of the SEC and Justice Department. Nonetheless, Benioff’s demeanor and business casual dress suggested that this meeting would not produce the kind of news some had expected. When asked specifically about Microsoft, a company once rumored to be a suitor, Benioff praised CEO Satya Nadella as an, “Incredible partner,” for his openness and the mutual effort to get the two software giants working together over the last year.
Benioff noted that Nadella’s Microsoft, is the “old Microsoft” that would reach out to software development partners to help them incorporate its products—such as office, Azure, Outlook—deep into their own to provide users with a well integrated experience. This is a posture that Nadella has taken with other software companies including NetSuite just last week in making a joint announcement during SuiteWorld. Some had seen this as a flirtation that would precede acquiring Salesforce but they were likely reading too much into the gesture.
At the same time, there was no mention of a Salesforce purchase of a minority interest in Sage, from time to time Salesforce has taken a minority position in other software companies; but not today. Others, like me, had expected this to be part of the announcement. For the most part the Q&A centered around relatively safe topics such as the need to treat customers well, the powerful combination of Sage and Salesforce in the market, and Kelly’s coming effort to transition Sage’s business model to reflect the recurring revenue aspect of cloud and subscription models.
It will be interesting to see if Sage Life is only the first of multiple cloud offerings based on the Salesforce1 Platform, or a one off. A lot depends on being able to convince partners that the time to get to the cloud is here, even for them. Failure is not an option for this transition and if the current partner base fails to seize the moment, Sage may have to consider either new recruits or a different business model.