Category Archives: Management

Observations on managing of technology companies

Cisco Kids

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Cisco CEO and Cheerleader John Chambers has a gift for understatement. In a recent mea culpa of insight, Chambers declared that Cisco had “disappointed investors and confused employees.”  This is akin to saying nuclear bombs annoyed some Japanese during World War II.  As evidenced by the chart on stage right (click to enlarge), Juniper Networks has been soaring, the tech heavy NASDAQ has been rising, and even the leadership spasmodic Hewlett Packard has been doing better than Cisco in terms of share price. And with little wonder.  Cisco, the once (and maybe future) king of network plumbing did what many large companies do, namely make the erroneous decision to diversify.  Diversification is not inherently incorrect, but it makes sense mainly for consumer products, markets where brand consciousness requires different brands for different products or price points, or where the primary market is completely tapped.  Cisco did not face a saturated … Continue reading →

Research Riddle

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The client was slightly stunned to see our proposal for conducting a market research survey.  He blinked twice, signed the contract, and asked if the terms included surrendering his first born male child. The good news is that we had no use for his offspring, and thus Junior was not part of the transaction. CEOs from start-ups and billion dollar enterprises alike balk at market research.  There is always a cost, and unless the price is three digits or less, they often hesitate to commit … until I ask them what the cost of failure is, and the contract gets signed instantly. The cost of failure fits nicely with our formula concerning market success.  The formal is beautiful in its simplicity, and reads: P(s) = 1-P(f) Or stated in English for those of your who forgot your college statistics class work, the probability of success equals one minus the probability … Continue reading →

Innovative Followers

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I love watching people fuss over false dichotomies.  Liberal/conservative, Republican/Democrat, Sane/Congress … This week’s dubious duo are Innovators and Fast Followers. In all industries, but in exaggerated form for high tech, there is a need to innovate. Mankind was built through innovation that allegedly improved life (fire did improve living though Twitter remains debatable). Many companies thrive on innovating while other lay in wait for innovation to occur and then compete through plagiarism. It can (and should) be argued that Microsoft rarely innovated anything, but made a tidy living by hijacking innovations from CP/M, Lisa/Mac, WordPerfect, and other also rans. Microsoft was the fast follower model to follow. This is not to decry the innovators. Apple grows consistently and has high stock price multiples not by dominating every market (aside from MP3 players) but from perpetually rethinking products. Collective gasps were heard when they introduced the Lisa (the Mac’s antecedent) … Continue reading →

Apotheker Approach

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“If you liked Hurd,” began the email from an HP employee, “Then you’re going to love Leo!” Yes, it was sarcasm on his part. Mark Hurd was a darling with Wall Street and a demon to HP employees.  Hurd did what imported CEOs often do, which is cut expenses by cutting employees and burning deadwood.  HP employees lived under unemployment fears but HP’s bottom line improved.  Some souls who still fondly remember Bill and Dave and a kinder, gentler and more stable HP didn’t much care for Hurd (or Carly for that matter).  Where as HP once stood for innovation and nearly family-style employee relations, it now more closely resembled Oracle in its ruthlessness. So it surprised nobody in HP that Hurd landed at Oracle after HP auditors found a soft-core porn star on Hurd’s expense report. What HP staffers and the larger tech and investment communities were surprised about … Continue reading →

Research Riddle

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Being 100% sure of anything is not only impossible, it is durn expensive. Market research is a common conundrum for every business.  In a perfect world where coffee is always fresh, all women are drop-dead gorgeous, and government obeys, a businesses would buy plenty of primary research to be completely certain about their marketing decisions.  Not only would such circumstances stuff obscene amounts of money into my own pocket, but the risk side of the businesses risk/reward equation would drop to zilch and assure huge rewards. Sadly, complete research would cost a fortune and never be complete.  Even Oracle has to guess once in a while, rolling multi-million dollar dice on limited research and a hunch. Former Joint Chief of Staff Colin Powell — who led the rescue of Kuwait — once said something like “I research until I have 60% of all critical information, then I go with my … Continue reading →

Disreputable Tech

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Dilbert’s distrust of marketing exists for a reason. Back when I had a regular job — during the Taft administration — my co-workers loved to drop Dilbert cartoons on my desk whenever marketing was the strip’s topic.  In one installment a customer asked Dilbert if he was lying about a product, to which Dilbert replied “No, that’s marketing’s job.”  This naturally reinforces the very stereotype that Seth Godin outlined in his masterwork All Marketers Are Liars. The reputation of marketing people has been rightfully sullied because many marketing “professionals” destroy reputations — of their companies and themselves.  They fail to grasp both the mechanics of reputation as well as its essence.  Much has been written about the former since reputation in social media is a hot topic, yet the latter has been incompletely analyzed for high technology.  Reputation for a company and its technology products are intertwined, and failed market … Continue reading →

Marketing Innovation

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I am overly fond of quoting Peter Drucker who said “Business has only two basic functions — marketing and innovation” and everything else is merely administrative labor.  But you have to give the man credit for stating a truth as succinctly as could possibly be done. The effect of marketing on innovation must be understood.  Unguided innovation has created many interesting, amusing and completly unprofitable technology products that caused tons of venture capital to evaporate (often through excessive and misguided marketing budgets).  Similarly, marketing occasionally identifies untapped markets, and is the seed for new and successful products (unless the market research was flawed, in which case see the preceding outcome).  Thus, marketing is both a creator and regulator of innovation. This subject is often not understood my entrepreneurs and even CEOs of major corporations.  Inbound marketing — the more interesting half of the profession — is all about understanding markets, … Continue reading →