All Posts in Strategy and Tactics

|In: Leadership|Last Updated:

Is the Internet just a bit-mover, or is it “the” new environment? I chose to describe it as the former while challenging the latter recently, branding me as dour and visionless in the eyes of some readers.

Nonetheless, the Internet is, physically, a way to move bits around. That’s an accurate description. It isn’t, however, the only accurate description, so to restore my luster, here’s an accurate description at a different level: The combination of the Internet and the personal computer (not the Internet alone!) has created an important new environment. In terms of impact on humanity I’d put it on par with telephony — certainly below modern medicine and agriculture, but definitely above Dennis Miller on Monday Night Football.

To understand the Internet’s potential impact, you do need to consider it as place, not technology. You’ll gain more insight from the ramifications of “cyberspace” than of IPv6 and routing protocols, just as psychology gives you more insight into human behavior than the neurophysiology of synapses.

As evidence that cyberspace is a locale, I offer this: Until business met the World Wide Web, IT had never met a customer. The Web is where they first made their acquaintance. It’s been the healthiest experience for IT since the PC first transformed us from a priesthood to just another bunch of employees with a job to do, because it’s IT’s connection to Real Paying Customers that has connected us with revenue.

Never underestimate the importance of revenue. Before the Web, we did underestimate it. We spent all our energy trying to cut costs. And cost-cutting is always a bad goal.

Yes, always. Improved efficiency is a good goal, which may involve reducing unit costs. Improved effectiveness and increased productivity are good goals, either of which may require cost reduction as well. But cost-cutting must be a means to a different end or all you’re doing is playing with numbers.

Want proof? Take a look at a recent study by Professor Gary Hamel of the Harvard Business School, described in the July 17th issue of Business Week. Hamel studied 50 S&P 500 companies whose earnings growth was at least five times revenue growth. No doubt their proprietors figured they were cutting out lots of fat at the time, but guess what: 43 out of the 50 imploded (okay, “experienced significant downturns”) within three years.

It isn’t difficult to understand why this almost has to happen. Think of a business as a hot-air balloon. There are only two ways to keep it aloft: Heat the air, or throw out some ballast. Cost-cutting is throwing out ballast, and eventually you must run out of it. What do you throw out next? The gadget that heats the air … that generates revenue … is a good candidate. It’s pretty heavy after all.

So out it goes, and down the company drifts, because no matter how much hot air its executives generate explaining the benefits of cost-cutting, it isn’t enough to maintain altitude.

Stay connected to revenue. Its importance goes way beyond the money. It energizes every employee in the company, where cost-cutting generates apathy.

To change metaphors, cost-cutters are like hunters who stay home cleaning, sharpening, and polishing their weapons. Yes, it’s important to do it, but whether you’re in the north woods or cyberspace, the excitement of hunting isn’t in weapons maintenance.

It’s bagging the game.

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|In: Career Management|Last Updated:

I’m mad at Bob Metcalfe.

But first … IS Survivalist Roger Crawford points out one of Microsoft’s business practices that’s even more unfair than its antitrust shenanigans, namely, how it describes new products or product plans: “We are developing product X that does functions a, b and c and we expect these types of people to use it.”

Its competitors, who say things like, “We intend to leverage our strengths in the buzzword arena to provide our customers with the tools they need,” are handicapped, because it’s never quite clear what they’re planning to produce, nor for whom.

For fairness’s sake, the courts should prohibit Microsoft from clearly explaining its plans ever again. Based on what I’ve read so far about Microsoft.NET, it appears the Redmond contingent is already complying, because just what the heck are they mumbling about, anyway?

As soon as I read about Microsoft.NET, I thought, “This is Microsoft’s SAA!” I figured I’d write about it eventually. Metcalfe had the same insight, though, so there goes my claim to originality. Nuts.

If you don’t remember SAA, it stands for “Systems Application Architecture”. IBM, in the early days of its implosion, developed it to do for applications what its Systems Network Architecture (SNA) had done for networking: Provide a standard architecture IBM could control. SAA wasn’t a product. It was a framework within which IBM’s future products would, in theory, fit.

IBM’s core strategy was to control architecture. Even when companies bought non-IBM components, everything fit the IBM model for functional elements, specifications, and interfaces. The strategy worked because you could buy every component from IBM if you wanted to. SAA failed because the only thing IBM had was intentions.

Sound familiar?

Microsoft.NET is a non-starter. Ignore it. If, miraculously, it succeeds, you’ll pay little penalty for waiting. You have absolutely no reason to be an early adopter (and of what? There’s no product!), and lots of reasons to wait and see what happens.

But this column isn’t about Microsoft, nor IBM, nor, for that matter, about Metcalfe’s beating me to the punch. It’s about you and your IT organization.

Take a look at your mission statement, vision statement, strategic intent, program charter, or whatever defines what you’re trying to accomplish these days. While you’re at it, read some of your recent communications. Does it all look like Microsoft.NET, or does it mean something?

Meaningless visions like Microsoft.NET are punishments for the sins of our forefathers. American industry, paralyzed by a generation of bottom-line managers who couldn’t see past financial statements, awoke one day to the need for vision. Ever since, every self-styled leader in business has made sure to start at least one sentence per day by saying, “My vision for this is …”

Don’t do that. Let others decide whether you’re a visionary or not. Your job is to paint a compelling vision for the future. While it’s tempting to be an artist, painting blurry abstract swirls others can interpret as they choose, abstract artistry isn’t leadership. It isn’t vision. It’s Microsoft.NET.

Grand visions are wonderful things. But if nobody can figure out that you’re developing product X, with functions a, b and c, you aren’t a visionary.

You’re just daydreaming.

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