Monthly Archives: March 2007

Business Wikification

What does Linux, Second Life, the Human Genome Project and the Chinese Motor Cycle industry have in common? They are all projects where success is attributed to mass collaboration. All of them fall under the category of product development where there is no owner but thousands of contributors, something we refer to in the technology World as open-source development. With the advent of the new web, it is becoming easier and easier to collaborate with each other and mass collaboration is becoming a new economic mode, changing the way people innovate and create products (and services). 

The finest example to explain the evolution of this phenomenon is Wikipedia (wiki meaning fast + encyclopedia) – a collaboratively created encyclopedia owned by no one and authored by tens of thousands of enthusiasts. With five paid full-time employees, it is about 10 times bigger than the Britannica encyclopedia and is more up-to-date than any other source of information online. Wikipedia uses free wiki software to allow multiple users edit the encyclopedia simultaneously. Critics have questioned Wikipedia’s reliability and accuracy, but despite all the risks of an open source development at this scale and continuous battles with detractors and saboteurs, studies have concluded that vandalism is normally short lived and Wikipedia is generally as accurate as other encyclopedias.

Product development through mass collaboration has reached diverse fields ranging from an encyclopedia to operating system (Linux) or application software (SourceForge has thousands of them), video game (Second Life) to mutual fund (Marketocracy), lending service (Zopa) to designing T-shirts (Threadless) to about anything. But success of Wikification is not limited to product development. The World of social networking is another example of how mass collaboration can be revolutionary. I am talking about the likes of MySpace, Flickr and YouTube. People use these portals as platform to share and connect across boundaries.

In order to thrive in this World of mass collaboration, businesses need to wikify themselves. There are a few things that are critical to the process of wikification of any business. First and foremost is sharing. Deciding how much to share beyond the organization is a judgement call. Share too much and you may loose your advantages. Share too little and you may not reap the benefits of collaboration. Scope and extent of sharing varies from one business to another. Other things that hold great importance are openness and peering. Communicating openly and honestly with the customers and lowering or eliminating boundaries go long way. Customers should be treated like peers and collaboration should be direct and global.

If you have dismissed wikification as irrelevant for your business, let us talk about an example that will make you think again. Goldcorp Inc., a company that mines gold went on to wikify its operations. When a main mine seemed to be dying and the company was struggling, the company came up with the “Goldcorp  Challenge”, where company offered prizes of more than $500,000 for new ideas on how to find and extract gold. Ideas poured in. Some came from wildly unexpected quarters and applied new disciplines to the problem. The result? Miners found about eight million ounces of gold since the challenge, pulling the company out of trouble.

Creating products based on market research and distributing them through traditional media will not take your business too far. Today more and more companies are developing products by engaging their customers in the process to have customer-driven innovation. Customers participation starts from the planning phase and is there throughout the product cycle. This produces immense opportunities for the marketers. Marketers can nurture the community around their products. They can use these communities to engage the customers at various stages. And it really doesn’t matter if you are selling baby diapers or sports cars or commercial aircraft, engaging customers in the process will always lead to better products and you will end up having an edge over the competition.

Success and Change

How will you define the relationship between success and change? At one end, success is by far the biggest catalyst for change. It’s the motivation behind the change. People put immense energy, time and effort in change if they can see tiny hope of success on the horizon. On the other end, success is the biggest roadblock in the path of change. People do not change something that lead them to success. Both these relationships between success and change are widely true for almost everything from heart patients to the business World.

There is always a resistance towards changing something that has given the taste of success. But as everyone knows, change is inevitable. Everything needs to change with time and people employ different means to attain change successfully. So first let’s see what does not work when you are trying to go for a change. First and foremost is fear. Fear is the worst motivator for change. Big corporations know that competitors out there are trying new things. Company executives are aware that they might have to face adverse effects, the stock price might fall and what not, but fear seldom motivates a change.

Next thing that doesn’t work is the force or show of authority. Authority from the Board of Directors and the force from them to meet the numbers does not make executives choose the path of change. They would rather stick to the well proved means in which they have confidence and that got them this far. Another important thing that doesn’t work is facts or information. Corporate executives have no shortage of information. They have all rational information in great depth with thorough research and analysis about how they are doing, where the industry is going, what is their future price to earning ratio and what not, but it doesn’t make them adopt change. Somehow all these facts start to look irrational and the past track record take precedence over everything else.

Same is true for even heart patients. They have lived a life so far in a certain way, and if that’s satisfying for them, to change it fear, force or facts have no role to play. Heart patients do not go for a change even after knowing that unhealthy eating habits and stress can take their lives. Fear does not bring the change. Force from doctors and family members is often incapable of changing the person. Doctor can provide them with accurate information that the change is required, but that doesn’t lead to change.

So now let’s talk about Success – the thing that works to bring change. The hope of success has immense power to lead to change. All the constraints and ego that lay in path of change are shelved instantaneously if there is a glimpse of positive results at the horizon. Giving an example here will be really unfair, because I think whatever change in the business World actually occur is fueled by the hope of success.

Another important thing that is required for a change to occur is the confidence of the people in the leader. People who are asked to implement the change should believe in the leader who is trying to lead the change. What better example here than Apple? Apple required change for more then a decade before it actually went through one. And why did it happen at the turn of the century? Because people in the company believed in the drive Steve Jobs had to bring about the change.

Experience also plays a big role in leading to change. Everyone has a tremendous potential for change, but to go for change, there should be an experience of positive results. Then that thing can be repeated to lead to a bigger change. People wanted a better search engine to use, so they tried Google. This was a positive experience, so they went on to use it again and again; this lead competitors to change their base and improve their search engines. All this is now leading to a massive change which has the potential of changing the World of computing and advertising.

Back to our analogy of heart patients…success, confidence and positive experience plays a major role here as well. Heart patients may change when they see hope on the horizon that the World can be a better place to live, and the people around them will have a better life if they change. By trying the change if they have a positive experience, they will start to believe in it and repeat it time and again to lead to positive change. No one can force a change, but only confidence and determination of the person can lead to it.

One of the biggest dilemma is how to kick-off change. Often the kick-off for change is against ones basic instinct. So the right way to go for it is to do a pilot and expand it. Try to get some short term wins along with keeping the long term view clear. The short term wins inspire people, motivates them and give them hope, which is required to fuel the long run. Success and change can lay down an intense and complex game of snakes and ladders, where success that is pushing back change is the snake which can take you down and the hope of success that motivates you for change is the ladder which can take you to new heights where sky is the limit. What you have to do is roll the dice carefully, because results here can change lives!

Tagline: it’s not just a catchy phrase

One of the most important things that define a brand is its tagline. It’s a statement that defines the company’s mission. Companies put immense passion and efforts in coming up with a few words that can define their existence. A successful tagline is something that really appeals to the target customers. Tagline is the most important ad a company will ever create and the most extensive marketing campaign they will ever launch, because it is the only thing that can become synonymous with the name and logo of the company.

Speaking of taglines, the first one that comes to my mind is the legendary Nike tagline – Just Do It. Just Do It has done wonders for Nike over more than a couple of decades now. Nike has an amazing marketing team that continue to find new and amazing ways to say it repetitively to the customer without letting them get fed-up of it. The universal tagline finds ways and methods to adapt to different parts of the World. Just Do It is owned by the customers everywhere and customers love it.

One of the taglines from more recent times that created waves is the eBay tagline: Whatever it is…find it at eBay. eBay connects directly with its customers using this message and when the customers go out shopping, they know that whatever they are looking for, there is always an option to find it at eBay. eBay has taken the tagline to another level by adding bells and whistles to the “it” factor by creating their ads around “it” and adding features to their website showcasing the “it” of the week, day etc.

Then there is Avis: We are number 2: so we try harder. This is also one of those taglines that communicate a lot about the brand. It tells the customers why they should go for Avis (because they try harder) and the passion and energy Avis is putting in the brand acknowledging the fact that they are not number uno. That makes you think what will Avis do when and if they become number 1?

This leads to a very interesting topic of revival of tagline. Tagline needs to revive with time. A company should make sure the tagline is not out-dated, different factors like competition, market dynamics etc. are taken into account and customers are able to connect to it. Coca cola is a perfect example of how a tagline is revived over decades. Coca cola started with “the real thing” in 1970s and with several iterations through the years (Coke adds life, have a Coke and smile, always coca cola, and so on) came up with “Can’t beat the real thing” in 1990s. 

But it is important to remember that although it is not “just” a catchy phrase, it should be after all a catchphrase. Something your customers can connect to, something that they can remember while making a buying decision and something that can guide them distinguish you from your competitors. What heights can a tagline take a company? Well it has the potential of becoming part of the everyday lives of your customers. When people start replacing the tagline with your company’s name in their daily chats, you can figure out that you have got a winner. So be it the Nike attitude or trying harder than Avis, tagline has the force of making a brand stand out above the rest.

Integration vs. Innovation

Innovation is the well known recipe for a success. Innovation in Product Development makes a company’s product (or service) stand out above competition. But it is not always true that the companies that makes the most innovative products are the most successful ones. So there got to be something that beats innovation. If we look carefully, success in most of the industries is dependent on mass production and distribution. Creating a breakthrough innovative product is just one piece of the puzzle. The product needs to take into account the different ways the customer is going to use it, the accessories and support system for it, the partner network and so on. It is important that the product attains mainstream adoption. Without all this, any level of innovation is of no use. Therefore, the one thing that I think challenges innovation is Integration.

By integration I mean creating an ecosystem for the product. Success of a product depends greatly on the packaging of the product. How well the product meets the complete requirement of the customer? How much percent of the market actually uses this product? How many products in the market use this product as their base? Answers to these and many other questions define the success of the product. The product, along with its ecosystem, should be the market leader and should meet all the requirements of the customers.

Let’s look into videocassette recorders (VCRs) format war to see how integration out beats innovation. Producers of Beta format for VCRs were the first to develop VCR commercially in 1975. Beta got substantial technological head start due to the innovative product they brought to the market. The producer of rival Video Home System (VHS) format were the follower to Beta in the market. But there was one difference between the operations of the two companies. Beta kept the exclusive rights for production and distribution of its format of VCR. They were reluctant to share the technology or form alliances with other producers in the market. On the other hand,VHS formed strategic alliances with other producers, producers of prerecorded tapes and distributors to manufacture and market their VCR format. This integration strategy gave VHS an early lead in the sales of its VCRs giving it a dominant position in the market. By the end of 1980’s, Beta was no longer in production making the VHS format the de-facto standard for VCRs. The VHS format VCRs were neither technologically advanced nor cheaper as compared to Beta format VCRs. But they were able to beat competitions in the global VCR market due to the creation of the ecosystem around its product.

There are numerous other examples that shows the importance of integration. Windows operating system can be another prime example in the category. The number of applications that run on Windows exceeds the numbers on any other commercial operating system. This acts like a base for the success of Windows. More than ninety percent of the computers in the World run Windows. Microsoft has a networks of thousands of partners who make applications for Windows enabling the ecosystem. So any company with innovation alone cannot take on Windows operating system. They will have to do the complete integration and create an ecosystem to make their offering attractive and usable by the customers.

It is important to note that integration in no way is a substitute for innovation. Innovation in product development is still required for the success of the product. But as we just saw, integration is something that can challenge innovation. So the new recipe for guaranteed success of a product – Integrated Innovation. Let’s keep on innovating and evolving the product, let’s keep beating the expectations of the customers, let’s keep challenging the competition, but at the same time, make sure that the ecosystem is moving along with the product. The bigger and denser the ecosystem, more is the integrated innovation and higher are the chances of success.