Category Archives: Technology strategy

Does someone have to die first?

double-classroomBlogpost for ACM Ubiquity, intro here:

Digital technology changes fast, and organizations change slowly: First using the technology as an automated, digitized version of the old way of doing things, then gradually understanding that in order to achieve productivity and functional breakthroughs. We need to leave the old metaphors behind. For this to happen, we need new mindsets, unfettered by the old way of using the technology. I wonder if my generation has the capability to do it.

Read the rest at ACM Ubiquity: Does someone have to die first?

Accenture and connected health

(Notes from an Executive Short Program called Digitalization for Growth and Innovation, hosted by Ragnvald Sannes and yours truly, in Sophia Antipolis right now.Disclaimer: These are my notes, I am writing fast and might get something wrong, so nothing official by Accenture or anyone else.)

Andy Greenberg is relatively new to Accenture, having a background in various technology companies involved in health and fitness monitoring.

The Internet of Things is the next era in computing, we are moving to the second half of the chessboard, Moore’s law is still active. Everything gets faster all the time, sensors cheaper, more and more connections and kinds of connections becoming available. A lot of the data growth has been driven by sensors. Smartphones everywhere, but can’t be assumed in the health space.

We need to capture the data, and we can’t send it all away – so we have to do data analytics on the edge, i.e. do analysis right away. You have to think about some things, such as engineers designing for engineers is not a good thing, and that if you can do something – such as connecting a device – it does not necessarily mean that you should do it. However, there will be 25 to 50b connected devices in the next few years – and it can deliver value. Tesla, for instance, can update its cars  instead of recalling them, improving customer satisfaction and saving money. An Airbus can send messages about needed parts, in the future they will be 3D printed at the airport before they land. There is a large gap between how many CEOs think IoT is important and how many have any kind of capability to do it.

IoT has enormous potential in health care. We have an aging population – and that is true of the health providers as well. Patients have different expectations: “health consumers are becoming consumers, comparing their experience not to the last doctor’s visit, but the last time they bought something on Amazon”. Spending on healthcare is increasing, as is the number of connected and connectable devices.

IoT enables connected health services, including merging the experience at home and at hospital, feeding data from home and feeding treatment from hospital to home after a hospital stay. The key is to understand the complexity of where people are at different times and manage accordingly, as opposed to thinking that they are either one kind of patient and another – we are all different types of patients at one time or another. Key is to focus on preventing readmission to hospital, but there might be more value in managing the healthy population – focusing only on the high risk patients may not be the right strategy. (Dee Edington – Zero Trends). It is not just about getting the ill well, but keeping the well well.

Moore’s law works both for fitness devices and medical devices. For fitness devices, wireless offloading of data makes a real difference, the holy grail is when the data offload disappear completely, if something monitors you all the time and alerts you to do something then you are more likely to use it. Medical devices have been more about diagnosis, now moving into monitoring and adherence. Proteus Digital Health, for instance, has a smart pill that monitors that it is being taken, for instance. Problem is that you need to wear a patch, and the first drug it is being applied to is one for schizophrenia – in other words, the patients that are most likely to be paranoid… There is also work done with smart devices, such as asthma inhalers, which can track how much it is used, geolocate, match to other people using inhalers same day, track pollen count etc. Find covariation from individual and communal data.

Healthcare players need to understand consumer expectations – Disney spent more than one million on wristbands to make the interaction with their parks much more frictionless. Healthcare providers should do the same thing – help their patients navigate through their services – including hospitals – to make the experience more seamless. This is happening in the pharmaceutical space: About half of all presecriptions are either not filled or taken incorrectly. Some names: Gecko Health, Propeller Health, Adherium, Inspiro medical.

When you add connectivity to the mix, it changes everything. One challenge is that even though the value is clear, the person receiving it may not be the one paying for it. This means that many device innovations are seen by their creators as a way to be unique, that will change over time because the value is much bigger of things being standardized and more widely distributed. You also need to standardize to the lowest common denominator from a connectivity perspective. Security is obviously an important issue as well.

Q: How do you make a secure app, how do you handle security?

Andy: Only a minority has a code on their phone, so you need a separate login. Security has be be part of the design from the very beginning. The biggest piece of guidance is to understand that.

Q: Can you see health care become completely digitalized?

Andy: Health care will always have a large human element, and there are huge hurdles in interoperability, but in between 5 and 10 years we will see significant action. The technology is not the problem any more, it is all about adoption.

Francis: We are stuck in a fee for service model that is, in my opinion, broken. Should move to a value model, and digitization can help with that.

Q: Where will we see the first real use of it?

Andy: Already seeing that, pockets of it. Maybe the most interesting and recent adaptation is the use of telemedicine about mental health. The VA hospitals are doing that to allow face-to-face conversations with clients with mental health issues. The key here is having payers pay for this as legitimate treatment. Remote monitoring is coming along. Change in payment models and health plans that change prices if you carry a device also drives this.

Q: The nordics are a bit of digital laggards – what will happen here?

Andy: The nordics tend to be ahead in technology and behind in business models. The aging population is a driver and Asia is a big area for that. Regulatory constraints are going to be a big hurdle, some countries are so high on privacy that they make it almost impossible to even try. Payment is important – if governments say they are willing to pay for making the elderly stay home longer, then it will come.

Elon, I want my data!

Last week I got a parking ticket. I stopped outside BI Norwegian Business School where I work, to run in and deliver some papers and pick up some computer equipment. There is a spot outside the school where you can stop for 10 minutes for deliveries. When I came out, I had a ticket, the attendant was nowhere in sight – and I am pretty sure I had not been there for 10 minutes. But how to prove that?

Then it dawned on me – I have a Tesla Model S, a very innovative car – not just because it is electric, but because it is constantly connected to the Internet and sold more as a service than a product (actually, sold as a very tight, proprietary-architecture product, much like whatever Apple is selling). Given that there is a great app where I can see the where the car is and how fast it is going, I should be able to get the log from Tesla and prove that I parked the car outside BI less than 10 minutes before the ticket was issued…

Well, not so fast. I called Tesla Norway and asked to see the log, and was politely turned down – they cannot give me the data (actually, they will not hand it over unless there is a court order, according to company policy.) A few emails back and forth have revealed that the location and speed data seen by the app is not kept by the internal system. But you can still find out what kind of driving has been done – as Elon Musk himself did when refuting a New York Times journalist’s bad review by showing that the journalist had driven the car harder and in different places than claimed. I could, for instance, use the data to find out precisely when I parked the car, even though I can’t show the location.

And this is where it gets interesting (and where I stop caring about the parking ticket and start caring about principles): Norway has a Personal Data Protection Act, which dictates that if a company is saving data about you, they not only have to tell you what they save, but you also have a “right of inspection” (something I confirmed with a quick call to the Norwegian Data Protection Authority). Furthermore, I am vice chairman of Digitalt Personvern,  an association working to repeal the EU data retention directive and know some of the best data privacy lawyers in Norway.

So I can probably set in motion a campaign to force Tesla Norway to give me access to my data, based on Norwegian law. Tesla’s policies may be American, but their Norwegian subsidiary has to obey Norwegian laws.

But I think I have a better idea: Why not, simply, ask Tesla to give me the data – not because I have a right to data generated by myself according to Norwegian law, but because it is a good business idea and also the Right Thing to do?

So, Elon Musk: Why not give us Tesla-owners direct access to our logs through the web site? We already have password-protected accounts there, storing documents and service information. I am sure some enterprising developer (come to think of it, I know a few myself, some with Teslas) will come up with some really cool and useful stuff to make use of the information, either as independent apps or via some sort of social media data pooling arrangement. While you are at it, how about an API?

Tesla has already shown that they understand business models and network externalities by doing such smart things as opening up their patent portfolio. The company is demonstrably nerdy – the stereo volume literally goes to 11. Now it is time to open up the data side – to make the car even more useful and personable.

PS: While I have your attention, could you please link the GPS to the pneumatic suspension, so I can set the car to automatically increase road clearance when I exit the highway onto the speed-bumpy road to my house? Being able to take snapshots with the reverse camera would be a nice hack as well, come to think of it. Thanks in advance! (And thanks for the Rdio, incidentally!)

Update a few hours later: Now on Boingboing!

Update Sept. 2: The parking company (Europark) dropped the ticket – didn’t give a reason, but probably not because I was parked too long but because I was making a delivery and could park there.

The disrupted history professor

Jill Lepore, Harvard HistorianProfessor Jill Lepore, chair of Harvard’s History and Literature program, has published an essay in the New Yorker, sharply critical of Clayton Christensen and his theory of disruptive innovations. The essay has generated quite some stir, including a rather head-shaking analysis by Will Oremus in Slate.

I find Lepore’s essay rather puzzling, and, quite frankly, unworthy of a professor of history, Harvard or not. At this point, I should say that I am not an unbiased observer here – clayClay is a personal friend of mine, we went through the doctoral program at Harvard Business School together (he started a year before me), he was on my thesis committee (having graduated three years ahead of me) and we have kept in touch, including him coming to Norway for a few visits and one family vacation including a great trip on Hurtigruten. Clay is commonly known as the “gentle giant” and one of the most considerate, open and thoughtful people I know, and seeing him subjected to vituperating commentary from morons quite frankly pains me.

Professor Lepore’s essay has one very valid point: Like any management idea, disruptive innovation is overapplied, with every technology company or web startup claiming that their offering is disruptive and therefore investment-worthy. As I previously have written: If a product is described as disruptive, it probably isn’t. A disruptive product is something your customers don’t care about, with worse performance than what you have, and with lower profit expectations. Why in the world would you want to describe your offering as disruptive?

That being said, professor Lepore’s (I will not call her Jill, because that seems to be a big issue for some people. But since I have met Clay (most recently last week, actually), I will refer to him as Clay)  essay shows some remarkable jumps to non-conclusions: She starts out with a very fine summary of what the theory of disruption says:

Christensen was interested in why companies fail. In his 1997 book, “The Innovator’s Dilemma,” he argued that, very often, it isn’t because their executives made bad decisions but because they made good decisions, the same kind of good decisions that had made those companies successful for decades. (The “innovator’s dilemma” is that “doing the right thing is the wrong thing.”) As Christensen saw it, the problem was the velocity of history, and it wasn’t so much a problem as a missed opportunity, like a plane that takes off without you, except that you didn’t even know there was a plane, and had wandered onto the airfield, which you thought was a meadow, and the plane ran you over during takeoff. Manufacturers of mainframe computers made good decisions about making and selling mainframe computers and devising important refinements to them in their R. & D. departments—“sustaining innovations,” Christensen called them—but, busy pleasing their mainframe customers, one tinker at a time, they missed what an entirely untapped customer wanted, personal computers, the market for which was created by what Christensen called “disruptive innovation”: the selling of a cheaper, poorer-quality product that initially reaches less profitable customers but eventually takes over and devours an entire industry.

She then goes on to say that the theory is mis- and overapplied, and I (and certainly Clay) couldn’t agree more. Everyone and their brother is on an innovation bandwagon and way too many consulting companies are peddling disruption just like they were peddling business process reengineering back in the nineties (I worked for CSC Index and caught the tail end of that mania. Following this, she points out that Clay’s work is based on cases (it is), is theory-building rather than theory-confirming (yep) and that you can find plenty of cases of things that were meant to be disruptive that weren’t, or companies that were disruptive but still didn’t succeed. All very well, though, I should say, much of this is addressed in Clay’s later books and various publications, including a special issue of Journal of Product Innovation Management.

(Curiously, she mentions that she has worked as an assistant to Michael Porter‘s assistant, apparently having a good time and seeing him as a real professor. She then goes on to criticise the theory of disruptive innovation as having no predictive power – but the framework that Porter is most famous for, the five forces, has no predictive power either: It is a very good way to describe the competitive situation in an industry by offers zero guidance as to what you actually should do if you are, say, in the airline industry, which scores very badly on all five dimensions. There is a current controversy between Clay and Michael Porter on where the Harvard Business School (and, by implication, business education in general) should go. The controversy is, according to Clay, mostly “ginned up” in order to make the Times article interesting, but I do wonder what professor Lepore’s stakes are here.)

The trouble with management ideas is that while they can be easily dismissed when commoditized and overapplied, most of them actually start out as very good ideas within their bounds. Lepore feels threatened by innovation, especially the disruptive kind, because it shows up both in her journalistic (she is a staff writer with the New Yorker) and academic career. I happen to think that the framework fits rather well in the newspaper industry, but then again, I have spent a lot of time with Schibsted, the only media company in the world that has managed to make it through the digital transition with top- and bottom-line growth, largely by applying Clay’s ideas. But for Lepore, innovation is a problem because it is a) unopposed by intellectuals, b) happening too fast, without giving said intellectuals time to think, and c) done by the wrong kind of people (that is, youngsters slouching on sofas, doing little work since most of their attention is spent on their insanely complicated coffee machines, which “look like dollhouse-size factories”.) I am reminded of “In the beginning…was the command line.”, Neal Stephenson‘s beautiful essay about technology and culture, where he points out that in

… the heyday of Communism and Socialism, [the] bourgeoisie were hated from both ends: by the proles, because they had all the money, and by the intelligentsia, because of their tendency to spend it on lawn ornaments.

And then Lepore turns bizarre, saying that disruptive innovation does not apply in journalism (and, by extention, academia) because “that doesn’t make them industries, which turn things into commodities and sell them for gain.” Apparently, newspapers and academia should be exempt from economic laws because, well, because they should. (I have had quite a few discussions with Norwegian publishing executives, who seem to think so for their industry, too.)

I think newspapers and academic institutions are industries – knowledge industries, operating in a knowledge economy, where things are very much turned into commodities these days, by rapidly advancing technology for generating, storing, finding and communicating information. The increased productivity of knowledge generation will mean that we will need fewer, but better, knowledge institutions. Some of the old ones will survive, even prosper. Some will be disrupted. Treating disruptive innovation as a myth certainly is one option, but I wish professor Lepore would base that decision on something more than what appears to be rhetorical comments, a not very careful reading of the real literature, and, quite frankly, wishful thinking.

But I guess time – if not the Times – will show us what happens in the future. As for disruption, I would rather be the disruptor than the disruptee. I would have less money and honor, but more fun. And I would get to write the epitaph.

But then again, I have an insanely complicated coffee machine. And now it is time to go and clean it.

Disruptive is not quite as disruptive, it seems

Reuters has a great little tool showing the evolution of various buzzwords (via Boingboing). One of the worrying things is that “disruptive” is showing a remarkable growth:

image

I see this tendency (as it is with most buzzwords) that anything new (be it a technology or something else) that replaces something old is termed “disruptive”. A disruptive technology or innovation, however, as coined by Clayton Christensen, is an innovation where the incumbent companies are the ones least able to respond to it. This tends to be because the new product or service has these characteristics:

  1. Your best customers don’t want it. These demanding customers (and you want demanding customers, right?) are willing to pay top dollar for a better product – hence you try to make your product better to suit them. You then ignore the customers who does not need, nor are willing to pay, for the performance.
  2. Its performance is worse – at least in the dimensions traditionally used to measure performance. In Christensen’s original example – the disk drive industry – the existing customers wanted hard drives with more storage and higher access speed. They initially ignored the physical size of the disk drive, allowing new companies to gain dominance as new, physically smaller disk drives became available.
  3. If you entered that market, you would lose money. A disruptive innovation attacks from below – with lower profit margins. A former CEO of a minicomputer company expressed it this way: “When the PCs came, we had a choice: Selling $200,000 minicomputers with 60% profit margins, or $4,000 PCs with 20% profit margins. What would you choose?”

The funny thing is, companies launching new products keep calling them “disruptive” – do they really want to say that their products are undesirable, poor and offering low profit margins? They might want to say that, but in my view most real disruptors prefer to keep their mouths shut and build their profitability under the radar of their entrenched competitors.

In other words, if a product is launched as disruptive, it probably isn’t.

MIT CISR Research Briefing on Enterprise Search

imageLast year I had the pleasure of spending time as a visiting scholar at MIT Center for Information Systems Research, and here is one of the results, now available from CISR’s website (free, but you have to register. Absolutely worth it, lots of great material):

Research Briefing: Making Enterprise Search Work: From Simple Search Box to Big Data Navigation; Andersen; Nov 15, 2012

Most executives believe that their companies would perform better if “we only knew what we knew.” One path to such an objective is enhanced enterprise search. In this month’s briefing, “Making Enterprise Search Work: From Simple Search Box to Big Data Navigation,” Visiting Scholar Espen Andersen highlights findings from his research on enterprise search. He notes that enterprise search plays a different role from general web or site-specific searches and it comes with its own unique set of challenges – most notably privacy. But companies trying to capitalize on their knowledge will invariably find search an essential tool. Espen offers practical advice on how to develop a more powerful search capability in your firm.

Introduction to GRA6834

This is an intro to a course (GRA6834 Business Development and Innovation Management) I am giving in the Fall, open to M.Sc. students at BI Norwegian School of Management, posted here because, well, I couldn’t be there to do the presentation myself. The course description is here, my presentation slides are here, I forgot to say when to turn to the next slide in the presentation (so you’ll have to guess from circumstance), and I do apologize for the rather booming voice, but this is what I could do on rather short notice…

If you have any questions, please email me.