The following is a very quick translation of an op-ed I wrote for Aftenposten, Norway’s largest serious newspaper. The occasion is that Clayton Christensen is coming to speak here on January 24, and I am emceeing the event. The argument shouldn’t be news to anyone (I hope), but the examples may be. The companies are all Norwegian, so forgive me if you don’t get the reference (Norsk Data, for instance, was a minicomputer company much like Prime, Digital or Data General, and lost out to PCs much like they did.)

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I just did a presentation to a Concours Group teleconference called the CLO Staff Meeting, with a number of large companies in the US and Europe participating. I talked about wikis, blogs, and other new technologies and how they both are new elements in the external environment – using blogs to address customers and suppliers, for instance – and very powerful tools for internal knowledge sharing and communication.

I was very encouraged by the lively discussion and good commentary – several of the companies, both in the US and Europe, were using wikis internally, and were considering blogs. They were wrestling with such issues as to what extent the wikis or blogs should be public or not, as well as how people’s concept of ownership of information was being challenged.

One reflection I made after the call was that blogs, in addition to the increasing use as communication tools with end consumers, will be great tools for shared services organizations to communicate with their internal customers – the relationship between an internal IT provider and their customers is more collaborative, there is less of a "leak" issue, and a blog might just be the tool to move the relationship from a transactional, user-provider relationship to a partnership where provider and customer are exploring new opportunities together.

If they are used honestly and creatively, of course.

Anyway – great fun!

PS: Here is a link to my paper Using Wikis in a corporate context, which discusses some of these issues.

Peter Drucker is dead at 95. Known as the "consultants’ consultant", he was a management author and speaker who, despite the lack of easy frameworks, models or quickie theories was one of the most read and influential thinkers on leadership and organizations. He was prolific: His first book was published in 1939 and first management book in 1942. He gained fame with The Practice of Mangement in 1954, and his autobiography Adventures of a bystander is a gem. For some reason, my favorite is his 1994 Harvard Business Review article "The Theory of the Business", where the main message is that "Businesses don’t fail because of sloppiness, lethargy or mammoth bureaucracies, but because they fail to understand that their assumptions about their environment–their theory of the business–no longer applies."

I met him only once, at a 1995 internal seminar for CSC Index employees in Cambridge, MA. He told the following story (as I remember it):

At the Mt. Washington hotel in Bretton Woods there is a rule that no guest can go to his or her room without being escorted by a staff person. This is for historical reasons. When the hotel was first built, it had six rooms in a row. Then six more rooms where built on top of them., and six more in the back. Then the bottom rooms where merged, two and two, because they wanted to have ensuite bathrooms. Then the hotel got further expanded, in bits and pieces.

The rooms are numbered chronologically, and the system is so confusing and the hotel so large that it takes a staff person to navigate.

Most companies are organized in the same fashion.

Drucker was a writer – he didn’t do oversimplified analysis or quick silver bullet solutions, but shared this thoughts and his wisdom, arrived at by reflective observation and precise language. A life well spent.

Update: The Economist, as usual, gets it right with their conscise and insightful obituary.

There are many books on personal productivity, and mostly I don’t touch them – they tend to flog some sort of software or life philosophy which is hokey at best and dysfunctional at worst. David Allen‘s Getting thing done (despite its rather tired subtitle The Art of Stress-free Productivity) is an exception. The reason I think that is partly that I found myself recognizing his central premise (that getting organized is essentially about not having to think about things, and having to think about many things makes us frustrated and interrupt-driven), partly that many people in my line of work praise this approach and swear by it. I also liked his practical approach to software versus paper – use whatever you are comfortable with, as well as his observation that many ideas come about playing with new technology or, for that matter, office equipment. And his system is actually rather wiki-like, with its emphasis on frequent reviews and restructuring.

Now, I intend to put his system to the test. As soon as I am back in my office in Norway. In the meantime, there are quite a few web sites with tools and techniques that want to improve on an already good little book. Plus, I can check out OPML as a productivity tool and think about getting my very own Brother labeler….

My colleague Tim Bevins forwarded me an article from strategy-business.com: Format Invasions: Surviving Business’s Least Understood Competitive Upheavals (registration required) by Bertrand Shelton, Thomas Hansson and Nicholas Hodson, all consultants at Booz Allen Hamilton.
I thought this a good article in that it explains disruptive innovations in a new way, including the point that disruptive innovations succeed if managers don’t fall into the trap of adding new services which take away the initial cost advantage.
What I did not like so much was the article’s insistence on the word “format” when all it means really is “technology”, at least the way Clayton Christensen uses it. They also set up a straw man attack on Christensen – namely saying that Christensen says that the new technology (er, format) underperforms the old. What Christensen says is that the new technology underperformes the old in the traditional dimensions or with the traditional customers, which is essentially what they are saying as well.
Nevertheless, many readers have trouble with the words “technology” (thinking it involves hardware or software or other complications) or “business model” (which sounds, and is, consultantese.) Perhaps “format” is a better format…..

Just listended, somewhat belatedly, to an excellent podcast hosted by Dan Bricklin, with John Sviokla interviewing Tom Evslin on his experiences within and outside large telecommunications companies.
This podcast pretty much sums up a lot of what I have written about myself about telecommunications strategy – the delayering of vertical integration as innovation happens at different rates in the various service layers that together form the service a customer wants to buy. Tom Evslin, of course, tells this with plenty of war stories and much better language, looking into a future where we all are our own telecom access providers (and charging spammers and spimmers for the priviledge of accessing us). And, contrary to many telecommunications commentators, he has a deep understanding of the differences between telecommunications markets in Europe, Asia and the United States, not only from the viewpoint of legislation and rules, but from actual results.
Just one example of many excellent points: Towards the end of the conversation, he is asked what advise he would give the existing mobile phone companies, and answers “Companies need to decide which horizontal layer they are going to excel at [….] while they still have money left [from the vertically integrated phase].”
Expect this podcast to feature as assigned material for my next course on technology strategy.

Good little article in The Economist about the coming battle between innovation and entrenchment in Microsoft. Should the company continue defending its market share in operating systems (with an increasing market share in servers) or should it morph into a powerhouse of innovation with Robert Scoble as the face of the open and friendly games-and-consumer-electronics version?
Cory Doctorow remarked (when he was in Oslo a few weeks ago) that Microsoft is an example of a company where great people together create something that is not that good (actually, he used stronger words than that). As I have said before, it is reminiscent of the old IBM. The people I have met from MS have been friendly, technologically astute – and very enthusiastic about everything their company is doing, to the exclusion of much else. The Economist’s article adds another wrinkle to this. Worth reading.

Just finished reading Sumatra Ghoshal’s posthumously published article “Bad Management Theories are Destroying Good Management Practices” (Academy of Managing Learning & Education, vol 4 no 1, pp. 75-91). I thought it brilliant, and was surprised when The Economist misunderstood it and started chewing him up for blaming Enron, Tyco and Global Crossing on bad MBA teaching.
The interesting conclusion in Ghoshal’s article is not in the topicality, but in the principle – his questioning of the dictum that maximizing shareholder returns is the sine qua non. He attributes the overemphasis on this to the fact that the organizational economics perspective has clear and coherent models – and the counterarguments are verbal and less precise. His argument incorporates risk, arguing that other stakeholders (such as employees in the short term and the society in the long term) carries more risk with their involvement in an enterprise than do the shareholders, who can get out at relatively short notice. (And a side note: I like the use of Elster’s framework of theoretical models a lot.)
When I took one of Michael Jensen’s courses on organizational economics at Harvard, ages ago, this was the one “terse” and economical argument against the organizational economics theories (which are extremely appealing from a purely intellectual viewpoint). One of the cases discussed was that of Safeway, which had undergone a cost-cutting and downsizing excercise, in order for the owners to extract value. It seemed to me that what was happening was that many people who lost their jobs really were exposed to the rough and tumble of market economics without being prepared for it – and that society somehow has an obligation to prepare people, or at least make them aware, of the risks of a market based system. Landes makes a similar argument (admittedly only in a footnote in Wealth and Powerty of Nations) when he talks about “[t]he contest [..] between lowbrow vested interests on the one hand, highbrow economic reasoning on the other.” (p. 266)
One way to take this argument forward might be to somehow weight the influence of stakeholder in a company based on the amount of risk they take. Though hard to do in practice, the many laws and regulations of worker participation in Europe have this effect, though I suspect that they are not underpinned by that theoretical viewpoint (and that they increase systemic risk, that is, undermine the competitiveness of the region they cover). A basis in risk adjustment would at least meet the conciseness criteria, since it probably could be shaped into a coherent theory. And there is the paradox of perverse incentives – the more risk you take, the more influence you gain.
Hmmmm… Have to think more about this – particularly as there is a new theory of the firm needed for knowledge based companies operating in a global setting, enabled by information technology.

In the category “things I should have written about ages ago but somehow forgot”, I have the huge pleasure of reporting that Bob Morison and Tammy Erickson, current and long-time colleagues from The Concours Group and in other ways excellent people, have been awarded the 2004 McKinsey Award for one of the best articles in the Harvard Business Review. The article, It’s time to retire retirement, is the result of a Concours research project called Demography is De$stiny (management summary), done in collaboration with Ken Dychtwald and his company AgeWave.
The project studied the implications of the rather alarming demographic evolution of the USA and Europe. The average American and European is getting older, and, as has been heavily debated in many newspaper articles, there is a problem in finding enough people who can work to finance social welfare system we have come to depend on. This is not news, but very few companies are acting on it – and the article points to the need for companies to stop pushing out old people and instead find innovative ways of making use of their capabilities as the workforce ages.
Incidentally – I think I can take credit for suggesting (but not inventing) the boiled frog analogy.)

The Economist has a review of Kurt Eichenwald’s new book on Enron: Conspiracy of Fools: A True Story, finding that top management in Enron were duped by some of their direct reports. It reads like a thriller.
I will eventually get this book – you learn more from corporate failures than success stories. For a taste – which also reads like a thriller – try the Powers report. It was the original report by the Board committee looking into the causes of Enron’s failure, and is a masterpiece in terse understatement.

And now it it time to announce the technology event of the year in Oslo:
The Norwegian Polytechnic Society invites you to a discussion with Cory Doctorow, themed “The Economics of Openness”
Time: May 9th from 7pm to 8:30pm, with informal discussions following.
Place: The conference hall, Norwegian School of Management’s Center for Management Education (at the old Marine College, Ekeberg – map reference), Karlsborgveien 4, Oslo. (Parking is available, or you can take the Ljabru tram line (about 10 minutes) from the center of Oslo.)
Open standards and access to information are not just about about teenagers downloading MP3 files. Historically, openness – in the widest sense of the word – has been an important contributor to economic success: Open societies experience faster economic growth and political stability than closed ones. Despite this, we see a trend today where public and private actors work to limit access to information, using both technical and legislative means.
The Norwegian Polytechnic Society, which has facilitated debate about technology and society for more than 150 years, has invited the Canadian author and activist Cory Doctorow to speak about openness as a basis for economic growth and innovation, followed by a debate. Doctorow currently works for the Electronic Frontier Foundation (EFF), an organization working for protection of electronic freedomes, and has as a representative of EFF followed the processes in international fora such as WIPO (World Intellectual Property Organization) and the EU Parliament closely.
Cory Doctorow is himself an avid user of information technology and a prolific content producer. In accordance with his principles of openness, he makes his whole production (including books) available through his web site craphound.com. He is also a regular contributor to boingboing.net, one of the most widely read blogs on the Internet. Doctorow is a lively and engaging speaker, who delights in audience interaction.
Free admission, please register to the office of the Norwegian Polytechnic Society, via email or telephone +47 2242 6870. (Or, if you prefer, by writing a comment to this post.)

The Feature has an interesting interview with Erik von Hippel (whose latest book Democratizing Innovation can be downloaded from his website in PDF format or bought from Amazon). He researches the contribution to technical development from lead users.
The interesting perspective here, of course, is that users (or, at least, customers) can lead you astray when you are facing a disruptive technology – and, at least according to Eirik Chambe-Eng in Trolltech, you cannot expect applications to “write themselves” in an open source model, only error checking and comments on extensions.
Looking forward to reading this book – the difficulty of using leading users must lie in when not to use them.

Virginia Postrel has an interesting take on Sarbanes-Oxley and all the trouble it creates for the IT department. I know from pretty reliable sources that SarBox is high on any Fortune 500 CIO’s agenda, because the added need for tracking and documentation creates no end of headaches throughout most systems. I was especially struck by the observation that what would be considered small companies in the US ($68m) consider going private again, just to avoid the nitpicking.

Barbara Kellerman: Bad Leadership.
This book is an interesting concept: Study bad leaders and identify just in what way they are bad (as opposed to identifying good traits of good leaders.) Notwithstanding the fact that bad leaders must have been good leaders in the sense that they got into a leadership position (and Kellerman acknowledges this point, though she does not follow up on it) the examples chosen are identified as failing because of specific traits, namely incompetence (Samaranch), rigidity (Mary Meeker), intemperance (Marion Barry), callousness (“Chainsaw Al” Dunlap), corruption (William Aramondy), insularity (Bill Clinton, seen as a failed leader for failing to react to the Rwanda atrocities), and evil (Radovan Karadzic).
I liked the concept, but unfortunately the execution is very weak – the examples of failing leadership are unclear, with shallow portraits and at least for some of the examples unconvincing reasoning. The book would have been better for a really critical editor and more time spent on each example. Pity.

Joseph Stiglitz, Brad DeLong and Aaron Edlin are among the people behind The Economists’ Voice, a new online journal, freely available as far as I can tell, in electronic format. I have only had time to glance at an article about the collapse of Enron, but given the quality of Brad’s blog, I trust this journal is a keeper.

My short essay on how to hunt down and capture professors was published last week in European Business Forum. This is a tongue-in-cheek article, but the topic itself is actually rather serious. One of the large differences between the United States and Europe is the tight links and mutual respect between business and academia in the USA – a relationship that lies behind much of the competitive advantage the USA enjoys in innovation-driven technology businesses. Yes, I know many US academics think business people are difficult to communicate with, and vice versa. But compared to the iron walls in Europe, US business and academe are bosom buddies.

Maybe I should write a similar essay on “how to bag a business person,” directed towards the professors….

I can only concur with the Economist’s take on the AOM conference in New Orleans. At least from the viewpoint of someone who dabbles in both camps and wonder why so few management profs care about technology, when technology to such an extent impacts business.

The AOM All-Academy symposium titled Executive Leadership and Information Technology – A Fragile Dance, described here, was great fun – the participants came at the issues from four different directions that together signalled that IT is both more invisible (at least if you don’t look closely) and yet more important than ever.
Jim Cash started (PDF slides here) by reflecting, based on his boardroom experience and his interaction with CIOs, that there has been a strong evolution in the role and expected contribution of CIOs – at least from the admittedly skewed sample he has. (Jim runs a invitation-only program called the Cash Concours, with 38 CIOs of Fortune 200 companies. The group meets quarterly, and Jim visits their companies twice a year.) CIOs are expected to help the firm with the challenges facing the whole firm, including the “large” issues such as the erosion of trust that lead to the Sarbanes-Oxley act, as well as the shifting definition of shareholder value, with more focus on long-term and risk reduction.
Jim considers IT-business-alignment – the notion that the business should come up with a strategy, and IT align with that – outdated. In the companies he is involved with, there is an IT/business convergence – and no new strategy is contemplated without thinking about the influence of technology and technology evolution on the specific business environment. The winners are the CIOs that are “redesigning themselves” to function as full partners in the strategy deliberation and implementation.
Two issues are particularly close to Jim’s heart, and in his view important for CIOs: One is the company’s awareness of and influence on technical standards. The other is the role of China – for many companies, the IT organization not only tasked with supplying IT for Chinese subsidiaries and joint ventures, but the IT organization is in many ways spearheading the company’s move into China. Understanding the role and evolution of China, including its future as an outsourcing location for IT services, is particularly important for CIOs of multinational corporations.
John Seely Brown (PDF slides here) started by noting that China as a market has important ramifications for US corporations – the challenge of selling their goods there, at 10% of the US price point, will lead to a lot of innovation which will make its way back to the US. Information technology is currently driven by the rapid commoditization in three levels: processing, open source, and open standards. He cited Akamai, Google, and the Internet archive as organizations that are able to provide stunning amounts of technology at 1-10% of the IT price point of regular companies – thanks to provisioning and virtualization technologies.
The main driver, however, is standardization – and standardization drives not only decreases in price but also enables flexibility – which is particularly important since IT frequently is the single biggest thing holding up M&A and other corporate change activities. With commonditized technology we can enable further specialization as well as learning.
The key challenge for corporations is to understand how to leverage resources they don’t own, as well as change their business model from supply push to demand pull. JSB cited Amazon, where he is on the board, as a particularly agile corporation – note that they are setting aside a relatively large portion of their screen space to the sale of used books, which means they understand the concept of reciprocity. A good way of understanding the new technology is to see the Internet not as wiring diagram, through which messages are sent, but as platform for inter-company applications.
Vijay Gurbaxani (PDF slides here) took the economic perspective, noting that information technologies have had a profound impact on labor and multi-factor productivity – and cited a number of companies that have created new dominant designs for business processes in their industries. He sees the new marketplace for outsourcing, which is moving from provisioning of IT towards business process outsourcing, as an important contributor to the commoditization of technology and processes.
Mark Kriger (PDF slides here) underscored the role of leadership, giving IBM as an example of a company that has turned itself around under new management. He wondered whether the problem of IT contribution might not be related to ITs perceived lack of explorative power (as opposed to power to exploit existing resources better), and saw the ability of CIOs to be leaders as the key differentiator.
After the presentations, a lively debate ensued – questions ranged from the security of XML applications to the role of IT in China. When asked by a prospective MIS teacher what he should teach the students which he wouldn’t have 5 years ago, the panel said “social software” and “managing vendor relationships” – the first as a new technology, the second as perhaps the most important supply skill for CIOs today.