Microsoft is NOT Market Orientated…

Hola Todos!

Perhaps a better title for this post would be “Microsoft is NOT Market Orientated Yet…(and we sure hope they will be soon…).  Firms that are market orientated have: (1) an incredible strong external orientation towards customers, (2) incredible strong external orientation towards competition (i.e., the market place), and (3) excellent inter-firm communication to capitalize and adapt to the information coming in from customers and competition keeping the firm ahead in the industry.  This description has not been a fit for Microsoft in a long, long time. If we look back and think about the major trends in tech over the last 10 to 15 years, Microsoft missed the Internet (at first), missed search, missed social, and appears to be missing mobile. I could fill this blog on the reasons why this occurred but let’s stay on the market orientation theme for now.

John Gruber of DaringFireball summed it up well: when Microsoft was founded, it’s goal was “to put a computer in everyone home” and Gates, Ballmer and Co. did an incredible job with that goal in the late 1970’s and the 1980’s to become the colossus it became in the 1990’s.  But once that goal was achieved and Mr. Gates stepped down from the CEO chair in the 2000’s, that same goal did not serve Microsoft as well.  The goal should have been modified “to put a computer in everyone’s pocket” but competition in both hardware (Apple, Samsung, etc) and software (iOS, Android, App Store, etc) blew by Microsoft over the past 6 to 8 years and is now an “also ran” in everything that goes in the pocket.

Prior to Facebook’s acquisition of WhatsApp, the top conversation in tech was “How is Microsoft going to pivot under the new CEO Satya Nedella?” Not many feel Mr. Nedella will double-down and battled it through in an attempt to be relevant in mobile.  Mr. Nedella rose to the CEO post from Microsoft’s cloud and enterprise divisions and that is everyone’s best guess to the direction Microsoft is headed.  I hope Mr. Nedella will get the firm to be market orientated again, spending company resources (time and money) figuring out where Microsoft would be in 2016 as opposed to trying to pay catch-up in the markets where they are an “also ran” in 2014 (see downward sloping trend in this post).

On a final thought, the desktop is no longer the dominant computing platform worldwide, however, Microsoft still has a killer app: Microsoft Office.  If Office were to become available for iOS and Android, that move could cement Microsoft “in everyone’s pockets” and provide even more cash to help fuel the Microsoft of the future. Mr. Nedella biggest challenge is to change the culture of Microsoft to think more of 2019, as opposed to 1999 – and it will not be easy as too much of the old guard like Frank X. Shaw probably listens to too much Prince music (see Frank’s quote in this post).

I still think this is the top story of the year to follow….

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

The Life and Times of Steve Jobs: Happy Birthday

Hola Todos!

If Steve Jobs were still alive today, it would be his 59th birthday.  To reflect of the life and times of Mr. Jobs, here’s a few nugget worthy links:

-Perhaps his best talk ever: the 2005 Stanford Commencement speech

-Steve Jobs Legacy: Inspirational Leadership 

-A history: the development of the iPhone

-A recent one from Dr. Dan-o: Steve Jobs was wrong about the Beatles

 

All neat stuff to check out today…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

WhatsApp Doc? Facebook Buys WhatsApp for $19 Billion

Hola Todos!

Shocker…$19 billion is A LOT of money. However, this is a great call from Facebook.  After doing a little digging in the blogosphere and thinking about this a bit more, Facebook is not just a social juggernaut, it has become the social juggernaut.

Now for few numbers: the deal was $4 billion is cash, $12 billion in stock, and $3 billion in restrictive stock unit shares that will vest over time to the 32 engineers – think of this as retention bonuses. (Yes, there are just 32 individuals, who are now all multi multi millionaires, who work at this firm). WhatsApp has over 450 million active daily users worldwide (most of which are outside the US).  That’s double Twitter’s active user base.  Moreover, 9 months ago, WhatsApp announced the service had over 200 million active daily users, which was more than Twitter then, and of course, now.  Shockingly, that also means WhatsApp is growing three-times faster than Twitter (and everyone else for that matter).  Could Facebook and WhatsApp be the only two social networks in the world with a billion users in 2015? I think so….

What does this all mean:

-Facebook + Instagram + WhatsApp = the 800 lb gorilla of social media

-WhatsApp is almost all mobile and mostly international – two HUGE wins for Facebook that has strong growth in both but dominate in neither (until now)

-I wonder what it will be like to go to work at SnapChat this morning when they just turned down $3 billion from Facebook this month – could someone overreact in the next week and back a truck load of money to their doorstep?

-As for losers: Google (who has been trying to buy WhatsApp for months), Yahoo (who does not have a business that is growing at scale and is also weak in mobile AND global)

-And the biggest loser of all?  Another (or the final) nail in Blackberry coffin? – Blackberry invented the global messaging category and now they are watching others make billions

-This is NOT a “bet the farm” deal for Facebook.  It is an aggressive deal for sure but Wall Street likes aggressive deals and I believe the stock will pop today.  Think about it and their current market cap – this is just $4 billion in cash and the rest in stock.  YOU CANNOT build a business with 450 million active users and growing at 3X at almost any price

-I have a feeling that this deal is going to change the culture in the valley from cautious VC money growth and IPO (like Twitter) to big time deals and M&A (like this deal)

-This reminds me of the YouTube deal way back when at $1.6 billion.  That was A LOT of money but it was all stock (Google’s evaluation when up more than $5 billion in the week after the deal) and Google picked up the dominate player in a category that Google was an “also ran.”

As always, here’s a bunch of cool links to check out:

The four numbers to what made this deal happen

-Facebook overcoming their mobile stumble of Home…priceless

A short overview video with nice background on the mobile messenger players

That’s a lot to think out today but today is not any ordinary day…

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

 

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

The Social Media Communication Center at Super Bowl 48: Part II

Hola Todos!

As promised in part I, I wanted to follow up with another post after my experience in the Social Media Communications Center was complete.  If I were to use just one word that could sum up the experience, it would be dialog. I was very impressed with how the SMCC team was (1) able to keep up with the volume of tweets coming in and (2) how much of the overall percentage of tweets coming out of the SMCC were part of a dialog.

SMCC photo

 

Perhaps the most overused word in all social media is engagement.  I get that, and I understand why the word engagement is so popular, but I feel dialog is much more apt.  I’m ball parking the number here but I would say north of 95% of all tweets coming from the @NYNJSuperbowl handle were part of a dialog.  It is one thing to listen in on conversations in social media, and it is entirely another thing to have a seat at the table and dialog within those conversations; that’s my nugget from this experience!

To wrap this post up, here’s the latest from around the web on the SMCC:

-Speaking of social media listening, keeping up with all those tweets would have not been possible without the excellent social media listening software from Tracx

Three takeaways from the SMCC

-Fox came in with their football robot Cleatus and video 1 has a nice short overview video of the SMCC while video 2 is a 1 minute highlight reel of the whole super bowl week.  This 2nd video has excellent inside shots of the SMCC.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

Steve Jobs Was Wrong About The Beatles

The Beatles were four of Steve Jobs’ favorite musicians; perhaps only Bob Dylan could rank higher. Jobs confirmed this fact at the end of the famous 2007 All Things D Steve Jobs/Bill Gates interview stating, “I live my live though either a Beatles or a Bob Dylan song” (1 or 1a). It was one of his life’s works, despite all the legal turmoil he experienced with Apple Corps (the music publishing arm of the Beatles), to finally get the Beatles on iTunes in 2010.  Yes, the Beatles were a passion of Steve Jobs; so much so that on more than one occasion, he likened his management philosophy to that of the Beatles.  While he was right about so many things throughout his career, Steve Jobs was wrong about the Beatles.

The following paragraphs will first outline Steve Jobs’ management philosophy and then detail two fatal flaws in his Beatles worldview.  The article will conclude with a glimpse into Jobs’ true intent with his “brutally frank” nature and how Apple has adjusted in the post-Jobs era under Tim Cook’s leadership.

 Steve Jobs’ Beatles Management Philosophy

Perhaps the best exemplar of Steve Jobs’ Beatles management philosophy was expressed during a 2003 60 Minutes interview (2). In brief, Jobs said:

“My model of business is the Beatles.  They were four very talented guys who kept their negative tendencies relatively in check. They balanced each other and the total was greater than sum of its parts. And that’s how I see business.  Great things in business are never done by one person; they are done by a team of people and we’ve got that here at Pixar and we’ve got that at Apple as well.  So that’s what lets me do this. Well you know, when the Beatles were together, they did truly brilliant innovative work and when they split up, they did good work but it was never the same.  And I see business that way too.  It’s really always a team.” 

Jobs was a master storyteller as any of his keynotes or the 2006 Stanford graduation speech will attest. Many of his stories had reoccurring themes, although Jobs often retold these parables with slight variations. In 2004, Jobs’ Beatles management philosophy resurfaced in an interview with Fast Company journalist Brent Schlender (3):

“My model of management is the Beatles. The reason I say that is because each of the key people in the Beatles kept the others from going off in the directions of their bad tendencies. They sort of kept each other in check. And then when they split up, they never did anything as good. It was the chemistry of a small group of people, and that chemistry was greater than the sum of the parts. And so John kept Paul from being a teenybopper and Paul kept John from drifting out into the cosmos, and it was magic. And George, in the end, I think provided a tremendous amount of soul to the group. I don’t know what Ringo did.”

While Ringo may have got short-changed in this version of the story, one can see some common themes in Jobs’ Beatles metaphor.  First, the team is stronger than the individual as the sum is greater than the parts. Second, individuals may have bad tendencies and there is a need for those negative tendencies to be kept “in check.”

The most interesting variant, as well as, the most unique, can be found in Robert X. Cringely’s 1995 “Lost Interview” (4).  After a back and forth conversation on product development and the evolution of an initial concept to final product, Jobs says:

“…when I was a little kid, there was a widowed man that lived up the street and he was in his 80s and he was a little scary looking and I got to know him a little bit – I think he might have paid me to mow his lawn or something.  One day he said, “Come into my garage I want to show you something.” He pulled out this dusty old rock tumbler with a motor and a coffee can and a band between them and he said, “Come out with me.”  We went out to the back (yard) got some rocks – some regular old ugly rocks.  And we put them in the can with a little bit of liquid and a little bit of grit powder and he closed this can up and turned this motor on and he said, “Come back tomorrow” and this can was making a racket while the stones were (banging around).

I came back the next day and we opened the can and we took out some amazingly beautiful polished rocks.  The same common stones that had gone in, through rubbing up against each other, creating a little bit of friction, creating a little bit of noise, had come out these beautiful polished rocks.  And that has always been my metaphor for a team working really hard on something that they are passionate about.  That it is through the team, through that group of incredibly talented people bumping up against each other having arguments, having fights sometimes and making noise, and working together they polish each other and they polish the ideas and what comes out are these really beautiful stones.” 

Even in this early version of Jobs’ Beatles management philosophy, some common themes reoccur; team over the individual, the sum is greater than the parts, and there needs to be some tension or conflict to achieve the best result.

Two Fatal Flaws

There are two fatal flaws in Steve Jobs’ Beatles management philosophy: first, Jobs only viewed the Beatles from a fan’s perspective, that is, looking from the outside in. The second fatal flaw is that “keeping each other in check” can equates to… “It’s OK to be an asshole to other people.” Each of these fatal flaws will be discussed in turn.

The opposite perspective of outside in, is naturally, the inside looking out and even a causal Beatles historian would say that keeping each other “in check” or the existence of a “healthy tension” among the “Fab 4” would be a gross understatement, particularly in their later years.  In a Jobsian worldview, strong tension, heated discussion, and/or multiple disagreements among the leadership team would eventually produce a result that would be significantly better than if everyone had just sat around and blindly agreed with each other.  The Beatles did have a healthy tension during their earlier albums, particularly between John and Paul, but that tension went unchecked, turned toxic, and eventually stifled collaboration among the four Beatles leading to the band’s break up.

Once the Beatles grew beyond their chart-topping, pop-friendly albums, the boys from Liverpool created three albums, namely Rubber Soul, Revolver, and Sgt. Pepper that can easily be described as “greater than the sum of its parts.”  In other words, at this time in the band’s history, the Beatles were still collaborating as a team and it was rare to have a song completely dominated by one member of the band.  At that time, there was a healthy collaborative tension and the Beatles pushed each other to create the most cutting edge music in their field.

Unfortunately for the fans, the health tension did not last, turned toxic and the Beatles stopped working as a team.  While Pepper can be listed in the “the sum is greater than its parts” category, the landmark album represented a turning point in the history of the Beatles.  In multiple interviews describing the milestone album, George and Ringo confessed that their involvement  was not the same as previous Beatles works.  In other words, Paul’s or John’s individual dominance, as well as the tipping point from healthy tension to unhealthy tension, was the beginning of the end.

Post Pepper, that period (the critical misstep of the Magical Mystery Tour EP & Film, The White Album, Yellow Submarine, Let It Be, and Abby Road) can be characterized, as the parts are greater than the whole. During this time in the band’s history, it was rare for the band to create a song together.  Rather, it was much more common to have individual band members write and record songs and lobby to get them on the record.  Despite their team enhancing “corporate retreat” to Rishikesh, of which most of the White Album was produced during this time, the lads soon fell into old habits of back-biting and snarking each other’s work.  At one point during the production of the White Album, producer Sir George Martin recalled, “I remember having three studios operating at the same time.  Paul was doing some overdubs in one.  John was in another, and I was recording some horns…in a third” (5).

During the White Album sessions, a famous story in Beatles lore perfectly illustrates the parts are greater than the whole argument.  George was so upset with John and Paul after a 14-hour session where they half-heartily played on “While My Guitar Gently Weeps,” that he asked Eric Clapton to play on the track.  Clapton recalls, that he knew the other Beatles “wouldn’t like it” but George insisted stating, “It’s nothing to do with them.  It’s my song, and I’d like you to play on it.” (5).

Please understand, some of the most beloved songs by the Beatles occurred during this later time period.  In reality, however, these were not really Beatles songs but rather a Paul, or John or George song completed with the world’s best backing band.  Jobs’ management philosophy emphasizes the team over the individual, yet for the latter half of the Beatles existence, there was no team; the tension and the infighting were too strong for that to happen.  No one was able to keep each other in check, their negative tendencies were not balanced out and only Paul wanted the band stay together.  With the inside out view of the band, Jobs’ Beatles management philosophy does not hold.

Jobs second fatal flaw is well documented, as it was not uncommon for Steve to verbally cut someone down (6).  This second fatal flaw in his Beatles management philosophy is that “keeping each other in check” equates to… it’s OK to be an asshole to other people.  Jobs was famous for his brutal honesty which we know he used for effect to add some grit power into a conversation.  In the authorized biography, Walter Isaacson gave Jobs the last word at the very end of the book.  In his commentary, Jobs called his brutal honesty “the price of admission” (7):

“I don’t think I run roughshod over people, but if something sucks, I tell it to their face.  It’s my job to be honest.  I know what I’m talking about, and I am usually turn out to be right.  That’s the culture I tried to create.  We are brutally honest with each other, and anyone can tell me they think I am full of shit and I can tell them the same.  And we’ve had some rip-roaring arguments, where we are yelling at each other, and it’s some of the best of times I’ve ever had.  I feel totally comfortable saying “Ron that store looks like shit” in front of everyone else.  Or I might say, “God, we really fucked up the engineering on this” in front of the person that’s responsible.  That’s the ante for being in the room:  You’ve got to be able to be super honest.  Maybe there’s a better way, a gentelmen’s club where we all wear ties and speak in the Brahmin language and velvet-coded words, but I don’t know that way because I am middle-class from California (page 567). 

Perhaps it was Jobs’ outside in view of the Beatles that formed his brutal honest equals to being an asshole view of dealing with people.  He was a big Beatles fan had to be aware of the conflict among the Fab 4.  As a passionate fan, however, Jobs could have mistaken that the reason the band created such amazing music was because of the tension or the forceful nudging of each other; they kept each other in check.

I could not disagree more on this point.  I believe in honesty and I believe in being direct, but at no point do I believe anyone has to belligerent to get one’s point across. In an interview with the Harvard Business Review, perhaps Dr. Maya Angelou said it best (8):

“I know there are people who say, I’m brutality frank. Well, one doesn’t have to be brutal about anything. One can tell the truth and tell it in such a way that the listener hears it and really welcomes it.” 

A plausible theory is that the Jobsian brutal honesty was more a management tactic than pure personality. To further emphasize this point, a recent 60 Minutes interview with David Kelly, founder of IDEO and dear friend of Steve Jobs touched on this issue (9).  In the interview, Charlie Rose asked:

What is the biggest misconception about him?”

And Kelly responded:

I think the misconception about him was…he was kind of malicious.  He was not trying to be mean to people.  It wasn’t…he was just trying to get things done.  And you just had to learn to react to that.”

Apple in the Post-Jobs Era

As an academic interested in leadership, I have been studying Apple for the better part of two decades. I believe that Kelly’s assessment is the more accurate picture of Jobs. That said, I am not so sure Jobs understood the downside effect of this tactic. In other words, as with the Beatles, brutal honesty could break up the band. Tim Cook has the same view as David Kelly and learned to translate Jobs’ brutal honesty.  In a handful of times in the authorized biography, but particularly when Jobs returned from the Liver transplant, Cook often called Jobs’ brutal honestly “his passion” and attributed it to Jobs always striving for the best. On his first day back from second major medical leave, Jobs called a meeting and ripped into the upper management team.  As described by Isaacson (7):

“But was truly telling was the pronouncement he made to a couple of friends late that afternoon. ‘I had the greatest time being back today, he said.  “I can’t believe how creative I’m feeling, and how the whole team is.”  Tim Cook took it in stride.  ‘I’ve never seen Steve hold back from expressing his view or passion,” he later said.  “But that was good.” (489)

The Apple of today does not operate in the Beatles management philosophy; that was Steve’s mental model, not Tim’s (10).  Over the past 18 months but particularly in October 2012 when Apple and Scott Forestall parted ways, Tim Cook has been striving for more honesty and less brutality. Forestall is a brilliant engineer and was one of the key architects of Apple’s iOS mobile operating system, yet Forestall (sometimes called mini-Steve) was more interested in politics, power and fiefdoms.  Since iOS powered devices are responsible for over 80 percent of Apple’s revenues, Forestall felt he was more important than the team (i.e., the parts are greater than the whole).  Other influential managers, by their actions, indirectly confirmed Forestall’s worldview.  For instance, Bob Mansfield unexpectantly retired in early 2012 then un-retired to another senior manager role once Forestall was ousted.  Jony Ive did not want to be in the same room nor work with Forestall.  In a Jobsian worldview, Forestall was the tension, the grit powder that Jobs believed would eventually result in a better song. Cook sacrificed Forestall for the sake of the team, as the tension was unhealthy, unchecked and holding Apple back from its next stage of new songs.

I am optimistic on Apple’s future, as I believe Cook is unafraid of ghost of Steve Jobs.  While Forestall’s ousting was clearly a major indicator of Tim’s willingness to do what is best for the future of Apple, it is also a major indicator that Tim does not envision himself as just the torch carrier of Apple’s past. Beyond the October 2012 senior management shakeup, there are other indicators as well such as, Apple’s corporate social responsibility in China, the disbursement of dividends, taking on debt, and charitable giving just to name a few.  Cook knows the Apple of the past cannot be the growth engine of the Apple of the future. If the rapid and radical update to iOS 7 is any indicator, I am optimistic that Apple will not be resting on its laurels in the Tim Cook era; Cook wants the tension to be healthy, the collaboration among the band leaders to be strong, and most important, the songs to be amazing for years to come.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

Facebook, Microsoft, Non-Verbal Communication and a Bunch of Other Stuff!

Hola Todos!

Now that we are past the Super Bowl, it’s time to get caught up with EVERYTHING… including DigNuggetville.  I’ve been stockpiling potential post for weeks now and with so many interesting articles, it would be March before I get to anything new.  So to unclog the logjam, here’s a meta-list of super nuggets!

Enjoy!

 

Happy Birthday Facebook – what did you get for your 10th birthday?

-A nice 10-year highlight video 

Five Key moments that changed Facebook

-CEO Mark Zuckerberg on the Today Show with a nice video of FB’s headquarters

 

Microsoft has a New Leader

-Microsoft has a new CEO – How Satya Nedella will change the company

-Satya Nedella: Signs of Leadership

 

Nonverbal Communications Nuggets

-5 Keys to Great Nonverbal Communication

-What if…. Details Determined Good Communication?

-7 Steps to Earn Others’ Trust without Saying a Word

-Does Body Language Shape Who You Are?

 

 

A Bunch of Other Stuff (to unlock this reference, watch this video)

-The Logic Behind 19 Common Interview Questions

-How to Network Purposefully

-Five Things Dale Carnegie Can Teach You about Social Selling

-Jeff Bezos: A Strong CEO

-How Daydreaming Can Actually Make You Smarter

-Content Marketing Challenges

-Content Marketing and ROI

-Steve Jobs would go for a walk to clear his head

-Apple’s New Retail Executive: Angela Ahrendts

What is SquareSpace with headquarters in New York City?

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

 

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

The 2014 Super Bowl Ad Round-UP: Plenty of Surprises

Hola Todos!

The Super Bowl is one of my favorite nights of the year on Twitter and I spent most of the night on the #adbowl hashtag.  Since the game was such a blow out, much to Microsoft’s surprise when they created a great spot but then selected a 4th quarter slot, I feel more attention was paid to the commercials than usual. I mean the game was over in the first 12 seconds.

In my eyes, the Budweiser puppy ad took the crown – it was perfect in too many ways.  Interesting, this sentiment was practically universal on the #adbowl hashtag as well as Monday’s rankings.  In my top 5, I also have Audi, Kia (the Matrix!), Doritos “cowboy kid” and Coke in multi-language glory.

As for my surprises, (1) the game featured more serious than funny or shock ads, (2) the Audi ad did poorly in most of the rankings, (3) it seemed like 60-second ads were more popular than 30-second ads compared to previous years, (4) I’m still not sure what to say about that Bob Dylan and Chrysler spot, (5) kudos to Esurance for that end-of-game hashtag ad and (6), the overall quality was much higher than previous years.

Take Honda for instance – that was a solid ad and I’m sure it got many fans to stop and hug a family member while at a party but it was only mid-tier in this year’s rankings.  We also saw great ads from Doritos (time machine) Jaguar (evil dudes), VW, Budweiser’s Home Hero, Cheerios, Colbert’s Pistachio, Highlander w/Muppets, Chobani’s Bear in a convenience store, WeatherTech, MASERATI (at the bottom, really?) and Bud Light’s hidden camera spot.  Even GoDaddy did something on-point and tasteful with their body building spot.  If I were to sum the night up in one sentence; it was weird to have a clear #1 and a completely unclear #2 to #10.

It is not a Dr. Dan-o post unless it includes a bunch of links so here we go:

-The classic and original: the USA Today Super Bowl Ad Meter

-Youtube – complete highlight reel of all the commercials

-The Kellogg School of Management rankings featuring a nice 2 min video

-U2 was a nice surprise and yes, I have the song on my iPhone

-Behind the scenes on the making of the “Worlds Largest Human Doritos Chip” – this is a must watch

-And how can I neglect social?  The best of the best including JCPenny’s tweeting “drunk”

Now that’s A LOT to enjoy on a snow day…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

 

Associate Professor of Marketing

Stillman School of Business

Seton Hall University