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9 September 2009 • 7:00 am

Making Money From Giving Things Away

free_cover_200After a bit of a slog, I am now done reading Free: The Future of A Radical Price (Hyperion; $26.99), by Chris Anderson, editor in chief of Wired magazine. You may have heard of Anderson from his 2006 bestseller, The Long Tail. Anderson’s book hit my radar screen from several directions at once over the summer, including an interview on NPR’s Fresh Air (listen for free) with one of my favorite interviewers, Terry Gross, and a review in the New Yorker (read it for free) by one of my favorite authors, Malcolm Gladwell. When Gross and Gladwell are both talking about the same thing, it is hard for me to resist. So in keeping with the spirit of the topic, I used an old model of free, and got the book from our local public library. Free is also available as an abridged audio book for free (of course), online at http://www.hyperionbooks.com/free.   

Anderson offers an initially breezy, but eventually somewhat tedious journey through the concept of free. Even the word itself (which I swear must appear an average of ten times on each page) has to be parsed – free as in “freedom” and free as in “at no cost.” To ensure our comprehensive understanding of the phenomena of free, Anderson journeys from history into behavioral science, literature (science fiction), and pop culture.

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8 September 2009 • 7:00 am

Newsflash: Netflix CEO Likes Watching Movies – In Theatres!

the ubiquitous (and soon obsolete) red envelopes
the ubiquitous (and soon obsolete) red envelopes

The Tortoise’s interest (obsession?) with DVD rental company Netflix was renewed recently with a brief but revealing interview with Netflix CEO Reed Hastings on National Public Radio’s Morning Edition program. 

In addition to his candid admission that he likes watching movies – especially comedies – in theatres, Hastings talks a bit about Netflix’s drive to improve its recommendation algorithms, and of course its strategy to reinvent itself (validating our earlier observation) by making obsolete it’s ubiquitous red mailing envelopes. Its future is very much tied to negotiating more deals with movie studies to stream content directly to TVs and computers. But another part of this strategy depends on increasing availability of Wi-Fi equipped televisions. Says Hastings, “I think that we’re on a trajectory over probably 10 years to have nearly everything on streaming. Not just Netflix, but other firms also — and also, to have Wi-Fi built into every television over 10 years.”

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4 September 2009 • 7:00 am

Perception Is Reality: Why Subjective Measures Matter, and How to Maximize Their Impact – Part III

This series of posts (in three parts) is adapted from an article of the same name that appeared in Harvard Business Publishing’s Balanced Scorecard Report in 2006.

In Part I, I asserted that perception matters very much to the strategy of an organization. Perception of external stakeholders, of customers, and of employees. Often, the change program requires measurements of customer and employee perceptions. How organizations go about gathering these perceptions is a key factor in the success of the change program. In Part II, we examined the challenges of survey design, and its impact on the effectiveness of the strategy-driven perception research. Here, we conclude with consideration of alternatives to surveys, and an examination of how to use perception data in the context of the change program.

Consider Focus Groups or Interviews

While most perception measures come from surveys, focus groups and interviews are also valuable tools. Focus groups can be a component of a survey (answering the complex question, “why are employees unhappy?”), or can simply serve as a way of capturing the perceptions of a small group when surveys would not be effective or practical. A focus group can reveal complex root causes for perceptions that may not be anticipated in a set of multiple choice responses.

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3 September 2009 • 7:00 am

Perception Is Reality: Why Subjective Measures Matter, and How to Maximize Their Impact – Part II

This series of posts (in three parts) is adapted from an article of the same name that appeared in Harvard Business Publishing’s Balanced Scorecard Report in 2006.

In Part I, I asserted that perception matters very much to the strategy of an organization. Perception of external stakeholders, of customers, and of employees. Often, the change program requires measurements of customer and employee perceptions. Here, we consider how organizations go about gathering these perceptions, which is a key factor in the success of the change program.

Ensuring Survey Success: Skillful Research Design is Vital

A survey program is the best way to regularly monitor stakeholder perceptions. E-mail and Web-based survey tools enable faster design, execution, and analysis, and have reduced the cost considerably. Many enterprises already have e-mail address lists from the Web sites and customer databases they maintain for direct communication and marketing purposes. Wireless telephony and text messaging enable nearly real-time data collection and analysis. Technology, however, is no substitute for good research design, and in amateur hands, such tools amplify the risk of getting unactionable results or even causing adverse consequences.

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2 September 2009 • 7:00 am

Perception Is Reality: Why Subjective Measures Matter, and How to Maximize Their Impact – Part I

This series of posts (in three parts) is adapted from an article of the same name that appeared in Harvard Business Publishing’s Balanced Scorecard Report in 2006.

When helping organizations design measures for their change programs, the moment comes when I float the idea of surveying employees or customers. Invariably, there is an uncomfortable silence, followed by protests that surveys are expensive, that they don’t tell them anything new, and that a steady diet of them annoys people and thus defeat their purpose. An unspoken source of resistance is leaders’ fear that survey results will challenge the comfortable fictions they may be sustaining to support their decisions.

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31 August 2009 • 7:00 am

Size Matters – But is Bigger Always Better?

Economist illustration by by Jon Berkerly

Economist illustration by by Jon Berkerly

The cover story in the U.S. edition of this week’s Economist proclaims that “Big is Back” – that the era in which large companies were on the defensive and the small company model was ascendant is coming to an end. And it is true that big companies have had their share of challenges over the past several years. The U.S. telephone monopoly AT&T was broken up in a court-ordered divestiture in the 1980s. Giants such as Enron, MCI, and Arthur Anderson fell prey to management misbehavior, and formerly powerful financial behemoths such as Merrill Lynch, Bear Stearns, Countrywide Home Finance, and Northern Rock were victims of the implosion of the past few years, and General Motors and Chrysler are meek shadows of their former selves. In an interesting and telling statistic, the Economist asserts that the share of GDP produced by big industrial companies fell from 36% in 1974 to 17% in 1998.

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28 August 2009 • 7:00 am

The Case of the Undermined Change Program – Part V

In Parts I through IV of this case, I recounted the history of an engagement I had several years ago with a particularly challenging client, WorldCo, a division of a large U.S. corporation. We met Reggie, the head of the WorldCo division, Karen, his head of strategy, and Linda, Karen’s deputy (all names and some details have been changed). Please read Parts I, II, III, and IV  now if you haven’t done so already.

The afterglow of the strategy map workshop didn’t last very long. Working closely with Linda, the next step was to recruit people in the WorldCo organization to identify prospective measures for the strategy map objectives. This process was designed to require minimal participation from leadership team members – the work was to be delegated deeper within the WorldcCo organization.

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27 August 2009 • 7:00 am

The Case of the Undermined Change Program – Part IV

In Parts I through III of this case, I recounted the history of an engagement I had several years ago with a particularly challenging client, WorldCo, a division of a large U.S. corporation. We met Reggie, the head of the WorldCo division, Karen, his head of strategy, and Linda, Karen’s deputy (all names and some details have been changed). Please read Parts I, II, and III  now if you haven’t done so already.

It would have been so easy for the workshop to have been awful. Forty-five executives and managers instead of the promised nine, many of whom had no advance understanding of what was going on. A not very cohesive leadership team, with at least some evidence of rivalry and political intrigue among them. Some open skepticism about the process (although this was typical), and an organization whose culture seemed to be all about impatience. And in me, a somewhat rattled facilitator.

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26 August 2009 • 7:00 am

The Case of the Undermined Change Program – Part III

In Parts I and II of this case, I recounted the history of an engagement I had several years ago with a particularly challenging client, WorldCo, a division of a large U.S. corporation. We met Reggie, the head of the WorldCo division, Karen, his head of strategy, and Linda, Karen’s deputy (all names and some details have been changed). Please read Parts I and II now if you haven’t done so already.

Each of the many dozens of strategy map workshops I have facilitated in my career has been different, but they have all been exhilarating. For up to eight hours, I (and typically a colleague) guide a group of executives to construct and agree to a concise yet richly detailed expression of the strategy for the organization (read more about the art and science of strategy map design). With only a few exceptions, executives emerged from their efforts highly satisfied with the result of their efforts, and energized about strategy execution.

Over the years, my colleagues and I have developed an understanding of the ingredients for a successful strategy map session. All members of the leadership team in attendance, and fully engaged (e-mail and telephone calls only permitted on breaks, no laptops or PDAs allowed). No more than about fifteen people in the room. A carefully developed draft strategy map that has been previewed with the leader of the organization. The pacing of the discussions that enhance and revise the draft map must be carefully managed, and it is important to “read the room” to sense when it is time to seek closure on a discussion.

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25 August 2009 • 7:00 am

The Case of the Undermined Change Program – Part II

In Part I of this case, I recounted the history of an engagement I had several years ago with a particularly challenging client, WorldCo, a division of a large U.S. corporation. We met Reggie, the head of the WorldCo division, Karen, his head of strategy, and Linda, Karen’s deputy (all names and some details have been changed). Please read Part I now if you haven’t done so already.

As I requested, Linda accompanied me to each of the interviews, and was able to provide valuable context and insight into what was revealed. Some members of Reggie’s leadership team were enthusiastic, and well informed about the intent of the program, but at least a couple of them had no idea what was going on, and seemed especially impatient with our use of an hour of their time for the interview. All knew of the upcoming full-day kick-off and strategy map workshop, but some were clearly skeptical. Linda wasn’t surprised. She told me that Reggie rarely met with his team as a whole, and that each of those managers was operating fairly autonomously. There were also some mild rivalries among those team members. Reggie was seen by Linda and others as having a “hands-off” leadership style.

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