Monday, September 29, 2014

eBay President Devin Wenig on Future Retailing

Devin Wenig, President of eBay Marketplaces, spoke recently with McKinsey about a vision and plan for the pioneering retailer.  Below are comments and quotes:

Within 24 months, no one will have a mobile strategy. They'll just have an omni-channel, connected-screens strategy.

I've shopped markets from Haiti to Bahrain, and I'll tell you NOT "everything is omni channel." 

I should say the death of the store has been greatly exaggerated. There will be a transformation of retail real estate, but not an end to it.
The sustainable advantage of a retailer, or of a digital commerce business, is data.

Big data is the exponential aggregate of customers; small data is the personal engagement with a customer.

Judgment and insight are the art vis-a-vis the science of big data and analytics retailing. 

There’s no reason that digital shopping can’t be both utilitarian and inspiring, and I think that’s the next wave.

Friday, September 19, 2014

Tim Cook on Apple Watch and Steve Jobs

Probably more so than Google Glass, a convenient, familiar wearable device like Apple Watch may take better root in the market and among consumers.  I long dispensed with wearing a watch, because time was already a part of whatever mobile phone I had.  I'm also very simple with my style, and the only piece of jewelry I wear is my wedding ring.  But perhaps like scores of others, I may consider wearing a smart watch.

The iPhone 6 and iPhone 6 Plus, along with the Apple Watch, that Tim Cook introduced last week were, to me, more like follower products.  I agree with him, and I am excited, too, at the watch being the centerpiece for healthcare.  That is, it can monitor real-time data about our bodily functioning and, if we choose to, relay that information to our physician.  Not just healthcare, of course, but also fitness and exertion.

Nevertheless, from Google and IBM, to Nike and Fitbit, smart, wearable devices, for healthcare and fitness, have been in works for a few years now.  I see the Apple Watch as definitely a step forward, but it simply does not carve a new path in ways that the iPod | iTunes, iPhone and iPad did.  In addition, Samsung is already way ahead of Apple with its latest big screen iPhone 6.  So again there may be very cool new features, but it is strictly a follower product.

Reference: Head to Head: How Apple's New iPhone, Watch Compare to Samsung's Products.

Cook doesn't seem to be the sentimental, emotional sort, though he makes a point of nurturing these qualities vis-a-vis Steve Jobs.  Keeping Jobs' office as it was, when he left, and upholding the culture he created since its founding are very sentimental things.  Cook does sound like quite an upstanding, reasonable man, and there is a lot of wisdom in acknowledging that the only person he can be is himself. 

But that's the rub.  For Apple to truly create new paths or carve new terrains, the company must have someone like Jobs.  Jobs was an innovator, but I argue that he was more a visionary than anything.  It was Steve Wozniak, and Jony Ive, and a host of staff who worked for him who were the real creators.  Jobs literally cracked the whip on them, and directed them, even coerced them to create the paths that led to the places he had envisioned.  To the extent that innovation isn't just about generating creative, clever ideas, but also about designing, engineering, manufacturing, marketing and distributing, then of course Jobs was the quintessential innovator.  He had the ideas, and others made them happen.

Wednesday, September 17, 2014

Cisco CTO Padmasree Warrior on STEM

Padmasree Warrior has a natural style about her, at once curious and knowledgeable as well as genuine and non-geeky.  Here, at the Forbes Women's Summit this year, she relates a few things about herself, her work, and her outlook.

From 10 billion connected devices now, to an estimated 50 billion by 2020, plus more in the future may exciting or it may all be worrisome.  Technologists focus on technology, and paint the rosiest possible picture for all of us to enjoy.  But I imagine that matters of privacy, security and humanity will temper the sort of advancements that Warrior speaks to and I hope give technologists cause to step back and reflect on the broader, ethical implications of their work.

Qualities such as curiosity and willingness to experiment, plus skills such as analyzing objects and problems and systematically investigating these things are hallmarks of a STEM education and a STEM professional (science | technology | engineering | mathematics).  A CEO may not have formal advanced education in any of these subjects, but they better possess the qualities and skills that make Warrior a good scientist and engineer.

It is impossible to know all the answers to every question, issue or challenge we may ever face.  But besides the importance of asking the right questions, as Warrior advises, knowing how best to understand the matter at hand, to search for the answers, and to arrive at working conclusions and decisions are crucial for leader.  Moreover, while many of us may hinge our view of things and people as predicated on control, predictability and information, the fact is that there is far greater ambiguity in our lives, work and environment than we'd like to admit.  So dealing with ambiguity effectively isn't just an option for leaders, but also an imperative.      

Monday, September 15, 2014

Engaging People, Getting them on your Side

There is much that I really like about these tips from Inc. columnist Minda Zetlin about how leaders can engage people and get them on their side.  These are fundamental human efforts, that are as perplexing to me at times, as they are to Zetlin, about why many leaders do not seem to adopt them enough.  I comment on the following screen shots of her tips:

Active listening means eye contact, open attention, and genuine interest in the other person

Seek first to understand, then be understood (rf. Stephen Covey) requires asking questions

A simple hello, an earnest how are you, and a sincere thank you can go a long way

I don't believe in apologizing for things I didn't do, but sometimes it helps to say I'm sorry anyway

People often want to be listened to and acknowledged and to have input and control

This requires EQ or empathy, and it means being honest but discreet and caring

E-mails and text messages are overused, so I agree with Zetlin: Make a more human connection

Friday, September 5, 2014

Howard Schultz Return, Starbucks Comeback

You have to eradicate the human behavior of relaxing, the human behavior of feeling like we have won.  What I have said in the last two years at Starbucks is, "There's no celebration, there's no victory lap, we haven't done squat."  I feel as if people need to understand that success is not an entitlement, it has to be earned, and earned everyday. 
Howard Schultz sounds like an impassioned football coach, reviewing his philosophy and values on leadership, just after winning the Super Bowl.  He sounds like someone who congratulates his team for their championship effort, lauds the Vince Lombardi Trophy in their possession, and then tells them, "We haven't done squat.  We have to win the Super Bowl again next year."

Every company, I think, must have the ability and the discipline to really be curious and look around the corners, to see things and anticipate things that other people don't see.  But that's not enough.  You must then have the courage to go after those things... the kind of courage that says "We're going to take a big swing." 
In the preceding article, I wrote that CEOs needed to see it, know it, and do it.  In particular, I echoed what Schultz emphasized about seeing things that others don't see or can't see.  It is important to do it, especially when the company is doing very well and when the business landscape is fast evolving.  It is important to read the instrumentation of the Titanic, and pick up oh so faint signals of an iceberg, well before it registers in the eyes of the crew.  RadioShack has been a miserable failure at this, so the Starbucks story offers a kind of salve for observers and students who may feel, even if vicariously, that misery. 

Re-enter, Howard Schultz as President and CEO.

Starbucks Corporation, graphic by Google Finance

When Schultz took a hiatus from Starbucks in 2000, Orin Smith assumed the roles of President and CEO (2001 - 2005) and steadily kept growing the confidence of investors.  However, stock performance peaked in 2006, then slid gradually, under the watch of Jim Donald, who succeeded Smith in 2005 and was asked to step down in 2007.  Donald had a reputation for turning around floundering companies, and clearly wasn't the right man for the top job.
The challenge that had confronted Starbucks in the early- and mid-2000s was one common to many organizations: Could the company continue to grow while preserving its culture and values? In some areas, the drive to expand, egged on by Wall Street, was compromising the company's ability to invest in its partners (Starbucks' term for its employees), deliver personalized customer service, and maintain a close connection to the local community.

In addition, McDonald's and Dunkin' Donuts had emerged as serious competitors, offering their own lines of specialty coffee beverages. Even so, Starbucks' financials for 2007, the year Schultz composed his memo, didn't look so bad. But the entrepreneur became concerned as he dug more deeply into the numbers. Sure, revenues were up almost 21 percent over the previous year, but had slowed by over a third; transactions per store were up 1 percent, versus 5 percent the year before. Same-store sales rose only 5 percent, the smallest increase in five years.

In January 2008, Schultz returned as Starbucks CEO, replacing Jim Donald, the man he and other senior colleagues had chosen to lead the company.
Reference:  Starbucks Reinvented.

Schultz probably didn't need to dig too deeply into the numbers to see that Starbucks was losing the confidence of investors.  There was evidently softening in the financials, but this didn't seem so obscure or hidden either.  I think what he must've picked up on the most was an intangible slippage in the culture and values, maybe aura, that he worked years to build.  He had the privilege of being out of the day-to-day fray of running the company, and clearly saw it, knew it, and did it

There is a saying in the US, which is applicable, it seems, for what Donald must have focused on, in light of Wall Street pressures:  Penny wise, pound foolish.  As Starbucks underwent financial problems, the Board was understandably keen to watch spending carefully, and was therefore disinclined to fork over $30 million to gather 10,000 staffers for a three-day pow-wow in New Orleans in October 2008.  But Schultz was pound smart.  He saw the big picture, and knew that getting the staffers jazzed up and bought into the reinvention was crucial to actually making that reinvention happen. 

You see, since Schultz took over, he not only regained investor confidence, but raised it higher than ever.

Wednesday, September 3, 2014

The RadioShack Fiasco and its CEO Hiring Team

(image credit)
I was not really a technology geek, but I enjoyed going to RadioShack to buy stereo accessories, cables, and audiotapes.  I had a mini-recorder, for example, to use for lectures in my university days, and a nearby RadioShack had mini-cassettes.  Also, in Lance Armstrong's most recent run ups at the Tour de France, he led a team sponsored by RadioShack.  Being quite a cycling fan, I had this added affinity with the storied American shop.
RadioShack once held a central place in the imagination of young minds and the world of technology, selling one of the first mass-market computers (the TRS-80) nearly 40 years ago.

But the digital revolution left it behind long ago, along with staples like tape recorders, landline answering machines and digital cameras.

After nine decades in the business, the company’s pulse in the electronic marketplace has grown as faint as a fading battery.

Its stock price is so low — it closed at 63 cents on Tuesday — that it may face delisting within the next few months by the New York Stock Exchange. When it tried this spring to stop the hemorrhaging with plans to close 1,100 of its stores, its lenders balked. Some analysts predict the company could run out of cash as early as next year.
Reference: RadioShack in Need of Rewiring.

The once storied American shop ran into major trouble over the past decade, and New York Times writer Elizabeth Harris attributed it to the shift to e-retailing, evolution of wireless technology, and fewer electronic tinkerers among us.  But let's see if we can shed additional light on what went terribly wrong.

Not just wireless, but the radical, fast-moving developments in media and technology over the past 15 years must have been a foreboding landscape for RadioShack.  I've been reflecting on the need for CEOs to step back and take stock of what is happening around them.  If they aren't do this on any regular basis, then it's akin to being the captain of the Titanic and sleeping at the wheel.

But that is just one thing:  They also have to the leadership, business and management abilities to do something effective with whatever they may observe or discern.  It isn't enough, in other words, to see the big picture or see below the surface, but they must also know what to do and be able to do it.

Finally, they must have the willingness, commitment and energy to carry out whatever strategy and plan they hatched up.  In brief, then, they have to see it, they have to know it, and they have to do it. 

So what was happening at the wheel for RadioShack?
  1. David Edmondson was CEO in 2005-2006, and left in a scandal over lies in his resume.
  2. Claire Babrowski came and went in 2006, as just a six-month CEO.
  3. Julian Day lasted five years, but apparently lacking in sales, leadership and management skills, he left in 2011 as one of the "Crappiest CEOs."  
  4. James Gooch then came in, but was himself merely a 16-month CEO, and in his wake left a devastation of a 73% drop in stock price in his wake.
  5. Joseph Magnacca is the current CEO, and has been in place since early 2013.  His aggressive scramble to right the ship hasn't exactly inspired confidence among analysts, however.
That said, I saw this goofy scenario in my mind: Each of RadioShack's CEO stuck on the captain's wheel, as it spins like a roulette wheel. 

So before a CEO can see it, know it, and do it, he or she must be the right CEO to begin with.  The hiring team at RadioShack was apparently incompetent and must take responsibility for this fiasco.

Edmondson, for one, came onboard as VP of Marketing in 1994.  Why it took so long for his faux resume to surface is baffling.  How Day lasted five years for being crappy, according to his own employees, is cause for head scratching.  What the hiring team saw in Gooch, I can only imagine.

For the sake of everyone at RadioShack, I hope that very team got it right with Magnacca.

Monday, September 1, 2014

Boston Beer Founder Jim Koch on Leadership

Jim Koch has run a successful business, since he launched Boston Beer Co. in 1984, which is now doing more than $700 million in sales.  His attitude about specialty beers and his competitors is not only refreshing but also instructive.  Athletes are fierce competitors on the field, but off of it many of them are good friends.  Koch doesn't want to hate his competitors, but wants instead to have a beer with them and enjoy their company.  Building such a friendship may underlie the kind of business cooperation he imagines:  There are 3000 specialty beer companies, and together they represent just 7% of the market.  If they work together, they can build that market.

Boston Beer is obviously not a technology company.  But the things that Koch mentions as the advantages of a small company, in the face of giants, is a parallel phenomenon with what goes on in the technology industry.  That is, small companies have the privilege of nimbleness, and they can translate this into more expedient decision-making and faster to market innovations.  They are the David to the Goliath, who may not have the agility or speed to respond to certain market opportunities and threats.

The leadership lessons Koch has learned are organic. That is, they are outcrops from what he has experienced in running a company and working with people:
  • The leader is never tired, and never has a bad day. The leader has to have more energy and spirit than everybody else, because you cannot expect more of your people than you expect of yourself.
  • Culture and values can substitute for resources, like good equipment, food or supplies.
  • People don't care what you tell them, instead they care about what you do. You're always visible.
Indeed being a leader is a tall order.