From NYT:
One Target employee I spoke to provided a hypothetical example. Take a fictional Target shopper named Jenny Ward, who is 23, lives in Atlanta and in March bought cocoa-butter lotion, a purse large enough to double as a diaper bag, zinc and magnesium supplements and a bright blue rug. There’s, say, an 87 percent chance that she’s pregnant and that her delivery date is sometime in late August.
We live in a culture that is crazy about numbers. We seek standardization, we revere precision, and we aspire for control. The very ancient and dominant belief of Western culture is that numbers are what is real. If you can number it, you make it real. Once made real, it’s yours to manage and control. We increasingly depend on numbers to know how we are doing for virtually everything. We ascertain our health with numbers. How many calories or grams should I eat? What’s my cholesterol reading? We assess one another with numbers. What’s your I.Q.? What’s your GPA? Your Emotional Intelligence? And of course we judge organizational viability only with numbers. What’s the customer satisfaction rating? Inventory turns? ROI? P/E ratio?
It is numbers and only numbers that define and make visible what is real. This is the "hard stuff," the real world of management- graphs, charts, indices, ratios. Everyone knows that "you can only manage what you can measure." The work of modern managers is to interpret and manipulate these numeric views of reality. The desire to be good managers has compelled many people to become earnest students of measurement. But are measures and numbers the right pursuit? Do the right measures make for better managers? Do they make for stellar organizations?
As we look into the future of measurement, we want to pause for a moment and question this number mania. We’d like you to consider this question. What are the problems in organizations for which we assume measures are the solution?
Q: 37 million units of iPhones shipped. When do we run into the Law of Large Numbers? What are the growth opportunities coming up?
A: 37 million is a big number. It was a decent quarter. It was 37 million — more than we’d ever done before. We were pretty happy with that, but let me give you the way I look at the numbers. As I see it, that 37 million for last quarter represented 24% of the smartphone market. There’s 3 out of 4 people buying something else. 9 out of 10 phone buyers are buying something else.
Handset market is projected to go from 1.5 to 2 billion units. Take it in the context of these numbers, the truth is that this is a jaw-dropping industry with enormous opportunity. Up against those numbers, the numbers don’t seem so large anymore. What seems so large to me is the opportunity.
What we’re focusing on is the same thing we’ve always focused on. Making the world’s best products.
We think if we stay laser-focused on that, and continue to develop the ecosystem around the iPhone, that we have a pretty good opportunity to take advantage of this enormous market.
Found a very interesting reading on Joel Poldolny who transformed the Yale MBA and now is heading the Apple University.
Are Business Schools to blaim (for the global financial crisis):
Business schools provide students with many technical skills, but they appear to do little, or nothing, to foster responsibility and accountability. Society implicitly trusted MBAs to do no harm when it allowed financial markets to operate in a relatively unregulated fashion–but its faith has been betrayed. As a result, there’s an active distrust of business schools and their graduates.
How did we get to such a pass? For three major reasons:
- The traditional MBA curriculum has divided the challenges of management and leadership in a dysfunctional way.
- Business schools communicate the idea that would-be applicants must measure the MBA degree’s benefit in terms of the additional salary they can earn.
- There has been little contrition on the part of those involved in MBA education after the crisis.
From FT:
The essence of the changes, says the dean, are related to the way businesses have changed. It used to be the case that business school departments were aligned with business school careers – marketing or finance. Businesses now are far more complex. “We’re at a unique time where all practice is being questioned,” says Prof Podolny. “What are business schools as professional schools doing if they are not noting down this kind of behaviour?”
A typical marketing textbook might have chapters on the design value proposition or bringing the product to market. But, he says: “If you talk to the CEOs, what they are obsessed about is how you get a handle on what customers want.”
The views of chief executives formed one of the central planks of the thinking behind the new curriculum, says the dean. “Usually a curriculum change is done by the faculty. This time we talked to recruiters and we looked at other schools.”
This focus on the organisational role rather than the disciplinary topic means that in the first year MBA students will study eight courses, working across public sector and private sector boundaries and addressing both internal and external constituents – courses with titles such as employee, investor, and state and society.
“What’s critical in these courses is that they are interdisciplinary in design and in content,” says Prof Podolny.
This has meant developing new teaching materials. As a former Harvard man, Prof Podolny has real insight into the way cases are written and taught.
“Nobody executes the case method better than Harvard,” he says.
“But are there things about the case method that we can improve? I think there are and I think we should.” Last summer, faculty at the school knuckled down to develop interdisciplinary case studies to complement the new curriculum.
On the new programme an overseas study tour is compulsory, with participants this month travelling to Argentina, China, Costa Rica, the UK, India, Japan, Poland, Singapore, South Africa and Tanzania. Initially, faculty leaders could be found for only seven of the eight tours, so the dean volunteered to co-lead the eighth, to South Africa and Tanzania.
“It’s kind of cool to think that the whole class will be overseas at the same time,” says Prof Podolny. “We’re going to try to structure it so that they are all aware of what the other groups are doing.”
From Yale News:
APPLE UNIVERSITY
His departure from the school after just three years was unexpected—especially in light of the school’s plans to build a new campus—according to the Yale Daily News.
Though Yale students and academics were surprised that Podolny chose to leave for corporate America, Podolny’s colleagues at Harvard say they were supportive of his decision—though Khurana adds that Podolny’s departure was “academia’s loss.”
David A. Thomas, who served with Podolny on Yale’s Board of Advisers and is currently a professor at HBS, says he feels Podolny made the right decision in leaving Yale when the opportunity at Apple presented itself.
“He left having been very successful. I really can’t say if he had stayed 3 more years, he would have had double the impact,” Thomas says.
Messina, who was in contact with Podolny during this time, says that Podolny’s decision to leave Yale for Apple was “gut-wrenching,” but ultimately motivated by one very specific reason: the opportunity to work with Apple’s then-CEO, Steve Jobs.
“He literally said to me, ‘This is my chance to work with our time’s Thomas Alva Edison,’” Messina says.
Thomas says that Podolny’s time at Apple will train him to be an even more effective leader, should he decide to someday return to academia as a university president or pursue further opportunities in the business world.
“He understands excellence,” Thomas says. “At the end of the day, Joel really can and wants to have a positive impact on society beyond just the boundaries of business or academia.”
From Brad Feld:
Instead, my new approach is to focus on three numbers. These three numbers should reflect “what’s going on right now in the business” and the trend of the numbers should be a predictor of what’s going on. As I think about the companies I’m involved in, I can define these three numbers in 60 seconds – they are almost always painfully obvious. Sometimes I do end up with four and have to make a choice, but I rarely end up with five.
The technology for displaying these three numbers is remarkably simple. They make this thing called a whiteboard that you can write them on. An email can go out to everyone in the company with the three numbers. That’s it.
The interesting thing is that I am currently working on developing those three numbers for my work at Family by Family and Families SA.
Daniel Tello does an amazing job of analyzing Apple’s growth into the future with some great analysis and charts of the historical growth and the diffusion of innovation theories.
Big Data’s Impact in the World – NYTimes.com
To grasp the potential impact of Big Data, look to the microscope, says Erik Brynjolfsson, an economist at Massachusetts Institute of Technology’s Sloan School of Management. The microscope, invented four centuries ago, allowed people to see and measure things as never before — at the cellular level. It was a revolution in measurement.
Data measurement, Professor Brynjolfsson explains, is the modern equivalent of the microscope. Google searches, Facebook posts and Twitter messages, for example, make it possible to measure behavior and sentiment in fine detail and as it happens.
In business, economics and other fields, Professor Brynjolfsson says, decisions will increasingly be based on data and analysis rather than on experience and intuition. “We can start being a lot more scientific,” he observes.
There is plenty of anecdotal evidence of the payoff from data-first thinking. The best-known is still “Moneyball,” the 2003 book by Michael Lewis, chronicling how the low-budget Oakland A’s massaged data and arcane baseball statistics to spot undervalued players. Heavy data analysis had become standard not only in baseball but also in other sports, including English soccer, well before last year’s movie version of “Moneyball,” starring Brad Pitt.
Retailers, like Walmart and Kohl’s, analyze sales, pricing and economic, demographic and weather data to tailor product selections at particular stores and determine the timing of price markdowns. Shipping companies, like U.P.S., mine data on truck delivery times and traffic patterns to fine-tune routing.
Online dating services, like Match.com, constantly sift through their Web listings of personal characteristics, reactions and communications to improve the algorithms for matching men and women on dates. Police departments across the country, led by New York’s, use computerized mapping and analysis of variables like historical arrest patterns, paydays, sporting events, rainfall and holidays to try to predict likely crime “hot spots” and deploy officers there in advance.
Measurement and data is quite useful and needs to be strategically to get the right things done.
I discussed this earlier in the context of a podcast by Horace Dediu. A small excerpt from the HBR artcicle "Marketing Malpractice: Cause and Cure" where this is first articulated.
By understanding the job and improving the product’s social, functional, and emotional dimensions so that it did the job better, the company’s milk shakes would gain share against the real competition – not just competing chains’ milk shakes but bananas, boredom, and bagels. This would grow the category, which brings us to an im- portant point: Job-defined markets are generally much larger than product category-defined markets. Marketers who are stuck in the mental trap that equates market size with product categories don’t understand whom they are competing against from the customer’s point of view.
Notice that knowing how to improve the product did not come from understanding the "typical" customer. It came from understanding the job. Need more evidence?
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Nitin Nohria, the Dean of Harvard Business School writing in the latest HBR. (Cant’ find the link online)
Harvard Business School has long used case studies–a method it adapted from Harvard Law School and introduced to business education–to project students into the role of managers solving business problems. Analyzing 400 cases in two years gives our MBA students a lot of practice at this. Case studies are a very effective tool, but they’re also limited: Business students can only imagine how they’d tackle a managerial problem, whereas medical residents are facing real-life health concerns.
To give MBA students a dose of real-world experience, HBS is introducing its biggest curriculum change in nearly 90 years. Students in our Field Immersion Experiences for Leadership Development program will engage in practice-oriented activities throughout the year. This work has begun on campus, where students have been taking product development workshops and crafting investment pitches. But the program’s most ambitious aspect starts in January 2012, when HBS will send the entire first-year class–more than 900 students–abroad to developing markets, where they will work in teams of six with a multinational or a local company to develop a new product or service offering.
In Istanbul, Cape Town, São Paulo, Mumbai, Shanghai, and elsewhere, the students might be interviewing customers, meeting people in the supply chain, or visiting competitors. At the end of each day, much like hospital residents after rounds, they will gather with faculty members to discuss what they are learning. (It is this daily faculty interaction that greatly distinguishes the experience from a summer internship.) They’ll gain contextual humility, realizing that the plans they conceived back on campus will meet unanticipated obstacles in the field.
This is quite a big change for HBS and a much needed one. The value of a MBA is what the student can deliver in real world. And a 2 year course coupled with real work will create opportunities to learn better. UniSA in Adelaide is particularly bad at this. Not understanding that MBA is for using knowledge at work, for finding a better job and for contributing to a better business in the profit, government and not for profit sector.
Seth as ever has written a quite obvious but interesting observation.(Via Modern Digital Business)
A brief visit to the emergency room last month reminded me of what an organization that’s pre-digital is like. Six people doing bureaucratic tasks and screening that are artifacts of a paper universe, all in the service of one doctor (and the need to get paid and not get sued). A 90-minute experience so we could see a doctor for ninety seconds.
[...]
School is pre-digital. Elections. Most of what you do in your job. Even shopping. The vestiges of a reliance on geography, lack of information, poor interpersonal connections and group connection (all hallmarks of the pre-digital age) are everywhere.Perhaps the most critical thing you can say of a typical institution: “That place is pre-digital.”
This is so true. I have been trying to digitize my work for such a long time. Mails in one place, documents to access, my online stuff, things that I work at home, articles I find on the bus reading on the iPhone, the various books and the ideas that I want to share. And don’t even get me started on meetings at work.
The online services for docs (dropbox, sugarsync, icloud), Kindle books and sharing options, Pinboard for bookmarks but more importantly time shifting software for articles link Read It Later and Instapaper are making a great difference to this. All of this still needs to fit into a workflow and we did not figure out the meetings part of it. And the various bits of paper we use everyday.
Into this world entered the iPad for me. In less than a week it has become my go to computer for most of the things. Always on, 10 hour battery, fast, but connected to everything. Most importantly with software like Note Taker HD (written by Dan Bricklin, the creator of VisiCalc, the original spreadsheet software) is just amazing. I do not take any notebooks now. A stylus, iPad and Notetaker HD. With this complete, I actually feel like I have entered the digital world. Lots more to do but I can experience the digital world now.
More importantly we need to figure out a way for our businesses to go digital. Not just in the use of softwares (like we use Paycycle for Payroll and moving to Xero for Accounting at TACSI) but to be able to build a workflow around it.
