Good to Gooder
So far, Satya Nadella’s moves as head of Microsoft echo the teachings of Jim Collins’ 2001 best seller, Good to Great. It’s a book about how and why some companies wallow in mediocrity and others operate at several levels of magnitude higher than their peers — think Apple for one and Salesforce for another.
Nadella has done a good job of articulating a vision for Microsoft — a Collins fundamental — and now he’s on to getting the right people on the bus and getting the wrong ones off. By wrong we should be clear that wrong isn’t bad, it’s just not in the direction of the future.
A clear example would be hardware. Microsoft added 25,000 people when it acquired Nokia and about 12,500 of the announced layoffs are scheduled to come from that workforce. These are good people, mostly, who make things that under, Nadella, Microsoft would prefer not to make though Steve Ballmer thought otherwise. To be fair to both people, there are a lot of things that Nokia had to do as an independent company that can now be rolled into Microsoft’s operations. Acquisitions always find these kinds of economies.
In this process, Nadella is articulating his vision more deeply because his actions are telling everyone this is what we do well and what we need to do more of. This is our future. At the same time, Nadella is, perhaps confronting some brutal truths, for instance, that Microsoft will not unseat either Apple or Google in the device and probably tablet arenas. Google’s Android OS is ubiquitous and free — not simply cheap — so it’s hard to compete. Also, vendors of devices that use Android are selling at cost (of the hardware that is) so it’s easy to see that if you want to make a lot of money in devices, you should stay out of the way and count the money you didn’t waste.
Next steps in this rolling reorg should be hiring and expansion in the areas where Microsoft can compete strongly. That should mean cloud computing in all its forms and possibly some really focused vertical market strategy for the Surface. Microsoft has some great technology and patents in Surface as well as in patents for sensor technologies. You don’t play three dimensionally exacting games like golf on XBox without some dandy sensing technology and that same stuff should find its way into myriad small devices that compete in the IoT bubble that’s rapidly ramping up.
If I had to guess, I’d say that Microsoft’s biggest next opportunity would be IoT and supporting the new business processes that it will spawn and Nadella has already made reference to processes several times.
At the same time, there is work to be done in Microsoft’s more traditional products. Things like Windows are unacceptably hard to install and use and that beast needs to be tamed once and for all. The company has a proud tradition of engineering and technical excellence around the OS but, let’s face it, today the OS is meant to be seen and not heard. Also, Apple announced almost a year ago that OSX would henceforth be free. It’s a simple download and at a cost of zero, there are shades of Android all over the place.
So Microsoft’s sweet spot seems to be in its server software, database, and Office, which should be all over Android, iOS and the Web as it is on OSX, and future IoT strategies. If you put that together there’s more than enough to occupy the company and to boost its revenues. That includes CRM and back office ERP systems. But while Microsoft prides itself on offering an integrated suite of front to back office solutions it’s going to need to decouple them and make all its solutions better able to work with other products like NetSuite, Salesforce, Oracle, SAP, and other apps that exist in other ecosystems.
In that vein, consider that last week, Apple and IBM announced a partnership that bypasses the things that made these companies competitors and focuses more on what they can do together. It’s a sign to me that we are changing paradigms again. Platforms used to mean operating systems, compilers and databases and while they’re all still vitally important, they’ve been commoditized to the point that they are increasingly homogeneous.
The new platform battleground will be in apps, their development and maintenance. A great example of all this is Salesforce which, I believe, uses the Oracle database, along with some lesser known products as well as Linux. What’s behind the Salesforce screen is largely taken for granted these days and the emphasis there is on apps and business processes, as it should be.
If that’s true, and I think it is, then that’s what Nadella is pushing his company towards. It might still require more cutting and reforming but that’s business and for Microsoft this change was overdue, but at least the company is now on the move.
Can I Get My Reputation Back?
Ray Donovan was US Labor Secretary under Ronald Reagan and a colorful figure. During his tenure he was indicted by a Bronx, NY grand jury on corruption charges stemming from a contract to build a subway line. The trial involved unions and the mob and was automatically sensational and the verdict turned on whether or not a minority owned construction company that Donovan was a part owner of was really certified for the contract it got or if there was mob influence. Donovan and his co-defendants eventually got off and when they did Donovan uttered a quip for the ages saying, “Which office do I go to to get my reputation back?”
Almost thirty years later Donovan may have at least a partial answer to the question. According to this article in the New York Times, the European Union is finally implementing a privacy law that allows people to petition Google and others to delete links to news stories and other things that might have once been true but that are no longer.
The battle between the EU and Google has been ongoing and hardly a soul that reads this will need much explanation to get up to speed on the issue. So Donovan can have references to his trial removed, at least in Europe.
This is not to say that the offending articles go away. As the Times story notes, although the Google links go, news stories still live on the sites of the organizations that first reported them. So this approach does not amount to a complete deletion but is more in line with what the Europeans call “the right to be forgotten” and in my mind that’s all that is necessary.
Last year I wrote an article for Computer-law Review International, a journal focused on all things computer-law related, in which I tried to tease apart some of the major threads of the argument and here’s a short synopsis of my findings.
First, the existence of search engines presents us with a problem that’s never existed before which can be summarized as, the past is always present. Anything that happened to or by you that was reported or posted has become immortal. You’ll be dead and those pictures of you skinny-dipping at president’s club in 2004 will be as fresh as the day they were posted.
Second, nobody wants to take responsibility for managing the links. The Markkula Center for Applied Ethics at Santa Clara University has posted a series of monologues about some of the ethical considerations posed by Internet data storage and information access. The series, “Internet Ethics: Views from Silicon Valley” consists of short videos on the school’s YouTube channel by ethicists and leaders of major software companies with relevant positions.
The leaders in the technology space pointed out reasons for not taking down data about individuals but all of it boiled down to two issues. Nobody wanted to take responsibility for failing to take something down and once you have a responsibility for doing just that, there is a natural question about penalties for failure to do so. No one wanted to go there. But also, the question of who pays for this service can become contentious rather quickly.
Third, information reported as true at some point in the past can become false. Take the case of a nurse reported in the Times last year in which she was caught along with her grown kids with a small amount of pot. In Connecticut, where the infraction occurred (and many other states), there are expungement laws on the books that say that for any person whose record is erased the person “shall be deemed to have never been arrested” and “may swear so under oath.”
For example, if you were indicted but never brought to trial the state doesn’t want to saddle you with a non-record record. Also, in some situations if you do community service prescribed by the court and remain in the law’s good graces your record can be expunged. In the nurse’s case, she did community service and her record was expunged but the original news story remained on a paper’s hard drive available to anyone who wanted to do a search on the nurse’s name. So, although the court had expunged her record, the news item persisted and the nurse found she was unemployable because prospective employers could easily find the article. So this was clearly a case of the past being ever present in ways that were never anticipated.
Not that long ago, if you wanted to really research a person or an issue, you’d have to visit the basement of a good library or other institution that keeps microfiche or microfilm of old newspapers. A lot of great investigative journalism and historical research has been done just this way over the years with this technique and even before this, researchers could access original sources at libraries through tedious effort. There was nothing like today’s technology with which anyone could punch in a few letters and presto, find out something that time had obscured.
So, in my view, the Europeans have it about right. The right to be forgotten is not exactly that; to me it is more like resuming a natural archiving process that gives people, over time, the benefit of the doubt. This is not a perfect system, it is overly manual and time consuming, but it is a start. I do believe though that the companies that are making money on search are the right ones to foot the bill for removing links.
Current research suggests that younger people today have less concern about what’s on the Internet about them. Some people hope that their attitudes will age into the population and the right to be forgotten will become an anachronism. But when you have nothing to lose things like this don’t garner a lot of your attention. As younger people — digital natives — age into adult life, they’ll find a system geared to finding this kind of information and using it against them as circumstances demand. So I am not betting on the EU’s approach to be a flash in the pan. More likely it’s the shape of things to come.
The Concierge Age
It always happens this way. A market erupts or transitions to something new or it goes the way of the Dodo and you miss the key turning point. But looking back you can always spot the telltale signs of disruption. People like me, who try to forecast these great events, have the reliability of a dartboard. Nonetheless, I feel like doing it again.
I think, and am declaring, that CRM is in the early phases of a major transition because business is making that transition and CRM has to keep up. The change I am watching moves CRM from supporting transactions to supporting business processes. Now, reasonable people can disagree on this and many will say what about the Sales Process or the Marketing Process, and the Service Process we already have. Transaction, Transaction, Transaction, I say.
How so?
Vendor supported processes all focus on the transactions at the end of the real processes that can involve many steps and require interaction between vendor and customer. My rule of thumb is, not surprisingly that vendors think about transactions but customers think about processes. True! Nobody woke up this morning saying, “I have to buy this or that today” unless they woke up yesterday or last month thinking, “I have this problem or this need, how am I going to solve it?”
We’ve been up and down the customer experience tree for more than a decade now figuring it was going to be the answer to how we get along with customers but we still have a hard time defining it. I think that’s because too often we imagine the experience ending in a transaction for goods, services, money, or information. And why not? That’s the way CRM has always worked but there’s a crucial point we have ignored — an experience orientation implies something customer driven. As I said last time, vendors have had no problem interrupting customers with offers for a very long time. But the era ahead will be all about customers interrupting vendors with the consequence that process will be paramount.
CRM was born at an unusual time when markets were exploding and everybody needed to get their first — you can fill in the blank here — mobile phone, computer, personal electronic gadget, software system, and on and on. You and I know those times as exponential growth and they are times when vendors take orders and engage in transactions as fast as possible, hence CRM’s transactional bias. But exponential growth is rare and short in duration.
Take a look at the exponential growth curves of the last few decades and you see that many have long since keeled over from their vertical rises and look suspiciously S-shaped today. Some, for instance PC’s, look like ballistic missiles returning to earth. In this environment, vendors chase very picky customers who need to be courted in processes.
So look at the marketplace right now. Amazon really nailed the transition, probably unintentionally, when it introduced the Mayday button for Kindle Fire help. The Mayday button is the tacit admission that, for now at least, we’ve made our products as simple and intuitive as we can and that henceforth there will be a growing need for good old hands-on, in the moment, no waiting around, customer service. As the Amazon site says:
“When you tap the Mayday button from Quick Settings, you can connect to an Amazon Tech advisor who can guide you through any feature on your Kindle Fire by drawing on your screen, walking you through how to do something for yourself, or doing it for you—whatever works best.
http://www.amazon.com/gp/help/customer/display.html?nodeId=201349900
That, my friends, is a blooming process. It is also not unique.
Not to be outdone, Salesforce.com this week announced a private beta for its SOS button/functionality for its mobile product. Now, through functionality built into the Salesforce1 Platform, developers can embed service into, wait for it, business processes mediated by tablets and smartphones.
Interestingly, these business processes will be primarily business-to-business in orientation and not Amazon’s B2C approach. Look for lines to blur quickly though. This is by far not the first example of embedding service. I wrote a story a few years ago about EA Games embedding service into their massive online games so that people could get assistance without getting out of the game experience, for instance.
But the Mayday and SOS buttons are something different. If you begin assembling all of the parts and pieces of modern CRM you quickly realize that well beyond data integration within the traditional silos, there are capabilities like content management, analytics, workflow, collaboration, and social that add up to a facility for updating CRM to support almost any business process — as a process and not a transaction — that you can name.
So from my observation point, customers are demanding more process orientation in their vendor relationships and the CRM vendors like Salesforce are providing the tools to make all this happen. It’s now up to the business community to accurately interpret the writing on the wall and move briskly into a new era.
Will it happen? Yup. Will it be brisk? Hard to say.
For many businesses this change might require a significant CRM replacement at a time when ERP systems are looking a bit dowdy and competent cloud based replacements are showing they have significant chops. But the good news is that platform-based ERP and CRM solutions offer tremendous flexibility to enable businesses to stage a rolling replacement using best of breed solutions for the front and back office all plugged together through the platform. The idea of a major rip and replace a la 1999 is not on the cards this time.
Instead, market share is up for grabs and the winners will be the businesses that can best deploy customer focused business processes that are customer-interrupt driven. The old notion of a vendor driven transaction process is sun-setting.
Last point.
I like everything about Mayday and SOS buttons but their names. The monikers imply a panicked reaction to a disaster — after all, SOS was coined as an abbreviation for “Save Our Ship,” as in, “We’re going swimming with extreme prejudice. Help!” That’s not the case here and if I were a software vendor I would prefer to accentuate the positive using the word, “Concierge” to describe the button. That’s more like what this functionality is all about. A concierge is someone who steps in to provide expert assistance only when asked, leaving the customer with an elevated feeling of success and gratitude. If you are building customer centered business process support that seems like the goal, to me at least. Let’s wait a year and see if I’m right.
