Small business is wary of social media
They are.. Just look around at what they are doing. I wish I had written this post.
Microsoft’s challenges with Skype
It will be worth watching the way Microsoft goes about leveraging their $8.5 Billion (should have paid Aussie dollars?) purchase of Skype, there will be a swarm of lessons to be learnt:
- Integration of a “free” service into a product/profit business model. This challenge will create sufficient tensions and cultural speed bumps to keep the academics busy for a long time. History is against Microsoft, most purchases like this that seek to integrate differing cultures fail to add value in the long term.
- Skype has a huge customer base, but is only marginally profitable, turning that around without risking the loss of the existing customer base who want a free service will be problematical
- To what extent is this the foundation of a marketing effort by Microsoft to protect their hugely profitable Office franchise from cloud based competitors like Google Docs, and how will this all pan out?
- Will the existing Skype customers continue to support the service now it is part of the “evil empire”
- How will Apple and Google react, both appeared to have been beaten in an auction for Skype. They both have communication products that compete with Skype, but few users.
- Can Microsoft assemble the capabilities to build new, risky, communication products that undergo a process of continuous improvement in the market with the input from users.
As a user of Skype’s free service, I am not sure how I would react to being charged, probably just “suck it up” but the commercial opportunities for conferencing calls using video must be immense, and the free service is a great entry point with a huge existing user base. Hopefully Microsoft sees it that way
Lean and 6 sigma revisited
In a recent conversation I again found myself between two smart blokes, one who was a black belt 6 sigma consultant who believed the problems of the world could be fixed by some aggressive, numerical focus on process improvement, and an exponent of Lean, who was of the “build the right culture and they will come” school.
To my mind, they are both right, and both wrong.
Six sigma means defects of less than 3.5/million. This requires rigorous emphasis on elimination of anything that creates variation in a process, or series of processes, ensuring that the output is exactly the same every time. Good six sigma implementations take great care to ensure that the output of the processes that are so exactly the same are adding value to the customer, but this can become lost in the welter of statistics and process control mechanisms.
Lean, by contrast starts with the macro question of “what customer value does this process add? What would the consumer prepared to pay for it?” Anything that does not add value to the customer, inventory, rework, excessive movement, and others, is deemed to be “waste” and is rigorously targeted for improvement using the old “Plan, Do, Check, Act” process, the ultimate objective of which is “flow” through a process.
The tools of lean and 6 sigma are widely interchangeable. I have seen 6 sigma implementations going through a 5S process, essentially a lean tool, and Lean implementations using SPC extensively to identify and manage out waste in a process.
It can be said, as my conversationalists did, that 6 sigma is an analytical, quantitative tool box, and Lean is a Cultural, management alignment toolbox. They they are both right, and both have their place, indeed elements of both are essential to competitive improvement.
The process of developing solutions
We humans like to do things in a consistent manner, each time we do something, it is comfortable to do it the way we did it before.
This is great if the way we have done it delivers the optimal outcome, but presents difficulties when the outcome is sub-optimal, and that is probably 99.99% of the time.
The management challenge therefore is not just to see a better way of doing things, but to institutionalise the process of identifying problems, and improving outcomes as a part of the way things have been done in the past, make continuous improvement so automatic that nobody notices.
Thinking about cloud computing?
Last week I attended a seminar run by www.Salesforce.com a very impressive dissertation on the capabilities they and their partners can bring to bear on the CRM challenges faced by all businesses. Obviously, the objective is to sign you up, and the challenge for non IT management is to understand the offer , stripping away the sales pitch, and understanding the value it can bring to your organisation.
Cloud computing is coming at us at a rapid rate, as the costs for installing an IT infrastructure drop, but the costs of maintaining that internal infrastructure increase. This is outsourcing of a capital item that is rapidly becoming commoditised.
When considering the options, there are a lot of opinions that will can be offered, usually from a perspective driven by commercial outcomes, but this discussion by two acknowledged experts is one that lays out a logic without an agenda, other than to acknowledge the reality of cloud computing.