Tag Archives: apple

BYOD is not the solution

BYOD is not the right answer to bad corporate IT.

It isn’t about the technology.

It never was.

The technology is just a tool.

A tool for YOU to use to achieve something.

If you don’t have the right tools, then the problem is NOT the tools, it the process that gave you the poor tools in the first place.

If you have poor tools, it is because someone decided that YOU are not worth spending the money on.

A cost/benefit decision was made … and guess how this worked out …

It is about value. The fact is that you are not valued. Your time is not valued.

If it was, then your employer would want you to be as productive as possible.

They would provide you with the tools to maximise your productivity.

That is why so many smaller advertising and design agencies and creatives have Macs and quickly update to the latest version of kit.

Creatives know that time is money.

Creatives know that better kit means things get done quicker.

Creatives know that quality matters.

Better work means beats the competition.

Better work means you win work and they don’t.

It is about survival.

Better kit = more work = more money

Creative companies have always known that tools matter.

Laptops, projectors, pens, paper … whatever the tools are, they matter.

Desks may be made from doors, but smart companies rarely skimp on productivity tools. Time matters.

But now all companies have to be creative … yet many haven’t realised yet that maximising creativity demands good tools. It doesn’t matter what the field is – music, art, design, engineering, medicine … tools matter. Whilst a good artist or engineer will use what they have, the best ones will demand the best tools, because they know that tools matter. They work faster and the outcome is better.

So, if you don’t have good tools you are not valued.

If the tools are poor, make the case for better tools in a way that people understand … spell it out in simple terms, and focus on one thing:

MONEY, CASH, MOOLAH, DOUGH, WONGA, LOLLY.

This is the only thing that matters.

If you cannot make the case, it doesn’t matter. Stick with what you have.

If you do provide a strong case and are ignored, then you don’t matter.

Now you have a decision to make. Do you want to work in a company that doesn’t value you?

It isn’t about the technology.

Bringing your own kit will not change the fact that you are not valued.

So, BYOD cannot be the solution.

 

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Could the alliance with Microsoft kill Nokia?

The last two years have seen Nokia’s market share and company value completely crater.

It has gone from being the global leader, to a company struggling to survive and define its future. The writing was on the wall a long time ago, but the last two years have  seen an implosion of every corporate metric, apart from losses, which continue to escalate.

The cause of this is pretty straight forward. Nokia made lousy smartphones. Simple as that. The world wanted smartphones; Nokia’s offerings didn’t make the grade, so they didn’t sell.

– The Blackberry was more secure and suited to enterprises.

– The iPhone redefined usability (something Nokia was never great at) – and provided a usable ecosystem of content (again something that was always terrible with Nokia devices).

– And Android provided a free credible operating system to every OEM who wanted it.

Symbian was acceptable for a while, but iOS and Android showed that a new OS was needed.

Nokia was slow to respond and the marketplace was never going to wait.

MeeGo, Nokia’s next generation OS never matched iOS and was dogged by a failure to deliver. The decision to kill this had a logic, but it also carried a risk which Nokia could lose control of its own future … and it has.

So Nokia was left as a company that could make good hardware, but failed dismally on the software.

Given this, the decision to focus only on Windows mobile seemed sensible. It provided a credible mobile OS, protection from legal attacks (Microsoft knows about IP and protects itself well) and the chance to ally with a major force in computing.

But … what seems to have been missed in many of the discussions is that this decision brought trade offs too.

A strategy is not just defined by what you do, but also what you don’t do (or no longer have the option to do).

– Nokia was unable to make phones to benefit from the Android juggernaut (and be a part of the 1.4m daily activations)

– Nokia is reliant upon Microsoft for new features to be implemented and adopted (and Microsoft is not agile)

– Nokia is dependent upon Microsoft release cycles for updates and the ability to counter competition it faces (as opposed to threats Microsoft faces)

– Nokia is reliant upon approval from Microsoft to develop its ecosystem … you could argue that it doesn’t own the ecosystem anyway. It is just a functional part of Microsoft’s ecosystem.

Nokia has stated that it wants to own and develop its ecosystem. By partnering with Microsoft, this will not happen. Whatever Nokia thinks – Microsoft wants to own the ecosystem. It will agree to allow Nokia to be a key partner, but owning the ecosystem? Absolutely not.

So, does the dedicated alliance with Microsoft provide Nokia with an overall positive or negative result?

Nokia has a partner that is committed to help keeping it alive through challenging times, but the company health is still very poor with an uncertain and worrying outlook. It may be saved for now, but is this at the expense of its long term viability and critically, its independence?

Judging by any accepted measure: revenue, cash flow, market share, handsets shipped, customer satisfaction, partner confidence, share price … Nokia is in big trouble. To reverse this position would require massive sales of Lumia phones – globally, at a price point that provided Nokia with viable, attractive and sustainable margins. It is this last bit which is hard to see happening any time soon. With Android having 1.4m activations per day – it is clearly the market leader – at least in the lower end of the market and for sheer numbers. With Apple about to launch the iPhone 5 next week and iOS 6 later this year – it is hard to see how the growth of Apple will be impacted. To most consumers, the iPhone is the default choice and Nokia offers little to change this. In fact, if you include the ecosystem as a key decision factor – Nokia is not a serious competitor at all. The Lumia scores well on usability with many reviewers, but a search of phone discussions will show that the Windows 8 interface and tiles do not appeal to everyone. And Nokia has no ability to offer anything else.

Even if Windows phone does gain traction in the market, other OEMs are watching this carefully. Several competitors including Samsung have announced Windows 8 phones (even if they didn’t actually have one built yet). So, should the Lumia start to sell and find that people want Windows phones, it will face increasing competition from other manufacturers. This is exactly what Microsoft wants to happen, directly in contrast to what Nokia wants.

The truth of course is that Nokia was in trouble before the Microsoft alliance. The failure of its R&D teams, the lack of focus on a changing market, the lack of discipline in delivering innovation were all clearly evident before the former Microsoft executive, Stephen Elop took his role as Nokia CEO. The board at Nokia must have known what Elop would do. There was only going to be one strategy when you appoint from the Microsoft top tier, but was this the right strategy?

Elop was right in pointing out that Nokia had a burning platform, but doing this publicly before he had the answer ready to sell was certainly not a smart move. All it did was undermine Nokia, accellerate the collapse of sales and lose confidence with consumers, partners and developers.

By allying with Microsoft, Nokia took a huge risk – because in doing so it forgoes some of the strategic options that may have helped its position.

But was there a better option?

– Could Nokia have delayed or downplayed the Microsoft announcement and delayed the implosion of Symbian sales. Absolutely. This would not have changed the ultimate collapse of Symbian, but may have slowed this down and kept confidence with partners until Windows powered phones were shipping.

– Could it have developed an Android phone, that although it would mean entering a crowded market, would have potentially slowed the growth of Samsung, delivered much needed ongoing revenues and kept its brand and reputation relevant. Absolutely. Margins would be lower, but revenues, jobs and manufacturing capabilities could have been protected. This was never a viable long term strategy, but for the short-medium it term offered a pragmatic strategic option. Unlike Samsung, Microsoft, Apple or Google, Nokia does not have a diversified portfolio of businesses, able to sustain an unprofitable part whilst the core survives. With Nokia, phones are the core business. Perhaps this is one area where Elop was the wrong choice. Would another CEO have recognised the danger of the Microsoft partnership and demanded more independence? I think so.

– Could Nokia have continued to develop MeeGo? Against Apple and Android, it is hard to see this being credible, but as a way to demonstrate innovation, build intellectual property and provide some worst case scenario resilience and autonomy, there is a logic to this. Not at the massive scale it was, but certainly as a niche OS, particularly if this was focused on a particular vertical or industry.

So was the decision to ally with Microsoft the right one?

It depends on what you measure and when.

Nokia is still alive … just.

But if you measure a company’s health by its share price – which is crude but valid – then to go from almost $40 to $2.46 in less than 5 years could never be judged a good outcome.

The story isn’t over, and we have seen other companies recover from similar weak positions, but the outlook is not good. Perhaps allowing customers to actually buy the product that you have just announced would be a start.

As with all market leader failures, the merit of strategic choices and the rejected options will remain the mainstay of MBA Case Studies for years to come. Of course, it is not over – but with the big announcement made, the new phones being announced (not launched), it isn’t looking good.

UPDATE: Sep 3rd 2013. Just under a year after this post was made, Microsoft announces they are buying the phone business of Nokia. Stephen Elop will step down from Nokia and rejoin Microsoft.

 

Consumerization and what IT departments still don’t understand

The consumerization discussion in companies always amazes me.

You know, the ‘bring your own device’, ‘iPad’, ’email on Android’ thing …

It is a huge change in the workplace, but so many companies still don’t understand real drivers behind this.

There is a reason that Jobs and Apple did not allow corporate IT departments to easily manage, control and restrict Apple devices .. because Steve Jobs understood that it DESTROYS the usability and performance – not just of the device, but of the user … or to give them their correct name, person (human being is OK too).

The main driver behind consumerization is not people wanting to own your own kit, it is a damning indictment of the failure of corporate IT to understand and enable people to get the job done. People want to use their own technology because they despise everything that corporate technology stands for and consistently the experience that is consistently delivers:

… unusable, slow booting, heavy, ugly (but cheap) laptops with a battery life that can just about survive one meeting, but not an international flight or even a working day.
… unintuitive, cumbersome, bloated, slow software that takes forever to download, requires you suspend common sense in using with the graphical aesthetic that a 4 year old wielding a packet of crayons would be ashamed of
… security policies that in the name of corporate compliance add additional steps that make the most simple of tasks even slower, more painful and more complex than finishing an advanced calculus paper whilst after a bottle of Grey Goose

And corporate IT people think it is about the device.

WRONG.

It is about YOU and what you do.

[Note that I said cheap laptops. The irony of course is that whilst IT departments often buy most of the people poor laptops, the total cost of ownership of these, and the cost of managing them is rediculously high. Not that this would bother IT departments as they buy whatever they want and don’t use the same rubbish that they provide you with. They also get to setup their machines as workable and reasonably usuable. Something that they deny to you].

Years ago, people had no choice. They had to use what they were given, they couldn’t afford the best devices and didn’t always appreciate what was possible.

But now they do, and corporate IT should be worried. Very, very worried. Today, people are working outside the system, focusing on getting the job done. Doing what they need to do to perform at work, keep their job and continue to keep the payslips coming. They are connecting these devices because they need to get to the data and information they need. And this is where most discussion of consumerization stops.

The discussion focuses on how we can make the devices secure, enforce encryption, remote wipe, add lots of compliance monitoring …

WRONG.

WRONG, WRONG, WRONG.

The correct way to look at this is very different.

Instead of thinking about the solution … start with the cause.

‘Our users, the people we exist to serve are voting with their wallets to NOT use what we provide. What we do isn’t working. Yes, we can show that we are meeting security commitments, but the services and technology that we provide is that BAD that people are choosing to buy their own devices, pay for their own services in order to do what they need to do to get their work done. In some cases, they know they may risk disciplinary action, but they still do it. We must be really failing people’.

You are.

Once you appreciate this, you can start to understand and envision the solution.

It starts with a mindset change of thinking: ‘what can we do to help people?’

– How can we provide great technology?

– How can we protect performance rather than killing it?

– How can we empower people?

– Yes, we have corporate responsibilities for security, but how are these implemented so as to minimise the impact?

Perhaps there is a simpler summary … ‘how can we get out of the way?’

Those that understand this shift will see consumerisation as an opportunity to redefine both the role and the relationship of internal IT departments. They will become teams that empower people, provide help to get things done. Become a department of ‘yes, here is how you can do that’.

My confidence is in this happening is not high though.

Most IT departments will resist this with every tool at their disposal … wanting to install software remotely wipe my personal PC without my approval is a pretty good testament to this.

But consumerization today is only the start of a this wave of change.

The next step should really concern IT departments … because these users, the people you have failed will next start asking very simple ‘why’ questions about corporate IT. They will ask why things take so long, cost so much, have such poor quality. In the past, people could be baffled with technical excuses, but not more. People now know what is possible because they are using this technology themselves in the own lives (and often in their work without telling you).

– They know a PC from a local store (or more likely a Mac from the Apple Store) is often faster, lighter, and pretty much better in all aspects than what is provided at work.

– They know that software as a service (even the enterprise stuff from companies like Salesforce.com) means that installs are not necessary, the patching is not a problem and that they can connect from any device. And they can get it NOW, not in months or years.

– They know that the cost charged by IT is a joke (checkout the price of memory from Crucial vs internal costs). They know the service is abysmal (Apple again) and they know that it doesn’t need to take 2 years to develop useless internal social tools when there are lots live today (Salesforce.com and every other SaaS provider).

So if you work in corporate IT, you either change, or be made irrelevant.

And a quick tip … after a while of you saying ‘no, it cannot be done’. People will not ask you anymore. They will just get on and do it themselves.

No battle, no fight, no executive show down. They just get on with it.

They will then ask ‘why are we paying for corporate IT’.

And then they won’t be.

 

How to win against Apple, think small not big

How do you beat Apple?

Product Manager Test

A quick test for would-be Product Managers faced with developing a product to beat Apple:

Insert the missing word:

If we made our product _______ we could beat Apple‘.

  • faster
  • cheaper
  • smaller
  • bigger
  • lighter
or any other feature you can pick …
If only we could find that one chink in Apple’s armour, that one thing that we could do better, then we could win‘.
There is only one problem with this approach.
It doesn’t work.
To understand why, we need to look go back to a business truism.
>> You can’t be hip and cool if you’re just like everyone else.

Agreed, this is business 101, because if you are like everyone else your product is not differentiated and you can only demand commodity prices. There are whole books on this subject, but the basic premise holds.

But Apple is not like everyone else. 

Everyone else is like Apple. Or at least trying to be.

Apple sets the standard in whole range of areas. 

  • The benchmark for a tablet is the iPad, not any of the 100+ replicas
  • The iPhone is the standard that new smartphones are compared to
  • Macbook product engineering quality is unmatched by any competitor
  • ….
And this is not just about the physical product …
  • Apple stores have the highest revenue per square foot of any retailer
  • No technology company comes close to understanding the unboxing experience
  • The integration of iTunes and content is unsurpassed by any rival service
Apple didn’t just build a better mousetrap, it redefined catching mice.
Yes, the mousetrap is better, but it is much more than that.

Apple changed the game.

It innovated (in a whole range of areas, not just the device, but the manufacturing as well), protected its intellectual property and established tightly integrated (and hard to copy) value chains. The iPhone and iPad are clear leaders in terms of revenue and profit by a long way over competitors. This revenue then provides a virtuous circle to continue R&D investment and innovate in areas competitors cannot afford (e.g. manufacturing and engineering) – not to mention out-market competitors. This success then brings its own network effects outside of Apple.

It takes time to get this right, but when this flywheel gets spinning, you have a very effective money making machine.

On top of this, Apple have high levels of customer satisfaction, unrivalled loyalty and a world leading brand that attracts a price premium that no few competitors have been able to match.

Not bad, but this took a long time to get right. The success you see today comes from years of iterative improvement and learning.

This didn’t all happen on day 1.

The stores are a recent addition. The genius bar was not a success initially. Early products were often too expensive to achieve mass adoption, and some like the Newton were market failures. What you see now in Apple is the culmination of many years of effort, and continual improvement. This combines into a ecosystem that to many competitors seems unbeatable.

So Apple are unbeatable?

In the short term, this is incredibly challenging, but over the medium and long term business history shows us that the chance of Apple retaining its current position is not great. That is not to say that Apple may not grow, and become even bigger (with some analysts predicting $1000 Apple shares), but competitors will certainly be able to compete in some areas.

So can a company compete with Apple and win?

The short answer is yes, but think small and think agile.

You need to find one market in which you can beat Apple, one demographic/segment/scenario in which you can better meet the user needs than Apple. This is not about having one core feature that is better, but a range of features that are more attractive to the buyer than the Apple proposition. This is not just about the product, but the whole product experience.

Every product or service is a compromise. It has to be. It is a combination of trade-offs. Price vs. performance, power vs. portability, flexibility vs. usability and so on. What you need to do is find a particular group of customers where you can deliver a better combination of trade-offs for them. The end result needs to be a product or service that is more attractive than Apple. This doesn’t guarantee success, but if you do this you are better informed than the majority of technology vendors that release products to compete with Apple, but fail to differentiate in a way that users care about. More importantly, they too often focus solely on the product and not the experience, thereby missing potential areas in which they could innovate or lead.

Can you think of examples of products fall into the following categories?

  • New product is well received, but support is lousy and new customers quickly hear this and avoid the product.
  • Great sales and marketing cannot mask a product that doesn’t work as advertised.
  • Limited content or apps quickly discourage buyers who see a fail before the company does
There are loads of them, and not just from minor companies. Almost all tablets fall into this space.
World leading companies release products that are quickly judged failures, because they try and compete directly with Apple without understanding what makes Apple successful. Are you listening RIM?

It is surprising to see how many times companies make the same basic mistakes.

They continue to launch generic products to a mass market and have no success.

They launch products that miss key user features.

But there is a better way.

Instead of launching generic products to a mass market, launch GREAT experiences to a homogenous group of customers. Win these customers over, prove your product works, build your fanbase, and start the flywheel turning. The move to the next group, then the next one. However small the flywheel is, get it moving. This is always preferable to a large flywheel that will not move whatever you seem to do. However big your company is, launching a product head-on against a successful innovative market leader is rarely a smart move.

Better to smart small, win and grow.

Do not mistake starting small though with a lack of vision or ambition.

They are not the same. Your objective in launching a new product is to understand your customer needs and prove that you can meet these – both to yourself and your customers. You then improve and grow.  Your vision can be world domination, as it was with Facebook, but start small and prove that you can meet customer needs. Facebook started with students in Harvard. When it won the students there, it moved onto other Universities, then other educational establishments, then country wide, then worldwide. All along, improving, listening to customers and building on success. The focus was on adoption and market penetration. Facebook was never about 10% market share. It was always about winning in the market it wanted to play in.

5 Tips for world domination

  1. Know thy customer. Focus on the outcome that they want to achieve and the experience you deliver to enable this. Understand the whole journey. Don’t focus on excellence in one or two areas if this means other areas fail, focus on not having any major fail areas. If you don’t know these areas, spend time with your customers and understand them. Understand what their human wants and needs are. Focus on the need at this stage, then you can define the solution. HP was never going to be successful with its tablet that was priced similarly to the iPad. It wasn’t as good in key areas and in many areas was noticeably worse.
  2. Prioritise. First things first. Always. Don’t launch new features if existing bugs are losing you customers. Fix what needs fixing. Keep adding to the list, keep reviewing the prioritisation and don’t be afraid to change this. Never drop the quality bar. This was what Zappos did. Innovate the experience, never, ever drop the quality bar.
  3. Don’t over-engineer. Put in the required amount of effort and no more. You can iterate to improve later. Do what is needed, then go back to the priority list. Improve, improve, improve.
  4. Know why customers want to buy your product. Test this with them. Many will lie, so test again. Adoption is your key metric here. You need to care about how many of your prospective customers are using your product. It is not about absolute numbers, but penetration.
  5. Get the customer stories as quickly as you can. Nothing is as compelling for sales as customer success stories. Make these your priority from the start. When you talk about what your product, talk about what REAL customers actually did.

 

That should allow you to start the flywheel spinning. When you have this going, your challenge is to keep this going. Make the next steps logical and simple. No big jumps. From one University to the next, to the next. Pick adjoining markets, similar groups. Stick to the original strategy, no radical shifts. Continue to prioritise and check with customers about the satisfaction with the product. Then repeat.

How do you know when you are being successful

There is one acid test for success. The incumbent player will react to you. Whether this is a competitive reaction or an offer to buy you, you will elicit a response from them. At this point you are free to decide to continue or cash in, your call.

Apple’s iPhone Business Alone Is Now Bigger Than All Of Microsoft

If you are Steve Ballmer, the CEO of Microsoft and reading this headline you can:

… dismiss competitors, you can challenge analysts who predict tough times ahead.

… invest in new products at the same pace you always did [typically a 3 year product cycle].

… follow what has worked in the past confident that it will work in the end [and dismiss those who question this].

This is the strategy for Windows and Office, and it worked pretty well, but is showing signs of fading (words saturated and market should be ringing here).

This has been the strategy with Bing and Windows Mobile. Which isn’t working so well.

But as time progresses, the evidence starts to mount against you that your approach is not working.

The competitor sells more than you had hoped, their market share grows, but you maintain your long term view.

Then BLAM! a statistic arrives that hits like a bucket of ice-cold water being thrown over you.

That statistic is here.

“Apple’s iPhone Business Alone Is Now Bigger Than All Of Microsoft”

Steve, time to wake up and do something about this.

Time to rethink.

You can keep arguing … all the way to irrelevance, or you can start to tackle this seriously by aggressively accelerating timescales and focusing resources on the battles that you NEED to win, rather than a load that you want to win. Now is the time to prioritise and shift resources. Stop doing what you don’t need to. Win what you must.

The IT industry graveyard is littered with companies that argued against analysts and customers, saying it is a marketing problem – “that they just don’t get it“. Microsoft just fired a load of it marketing people. RIM is the latest company that has recently adopted this strategy.

But there is one problem … it doesn’t work.

Consumers and in particular phone buyers ARE generally well informed. They have friends, they can see kit. They play with the kit in stores.

Go to mobile phone stores, the Microsoft phones are there. They look pretty good, but next to them is an iPhone … and guess what people are buying. My son played with the Microsoft phone, he thought it was OK. Pretty good. Better than an iPhone? No. He is aged 7.

I’m not going to write a quick fix here; with three short steps, ten bullet points or an action plan of what should happen, because there is only one thing that you should start to do … start listening. Firstly to the people inside Microsoft, and secondly to your customers.

Not the senior career VPs and SVPs. Not the group presidents. All of these sold out their backbone years ago, or left. Listen to the new starters passionate about Microsoft. Listen to those who are trying to be heard. Listen to those who email you, write TechReady papers, and build demos. Listen to those in the labs, those who code their own apps, those who want to beat Apple with great products and innovation. There are a whole load of them, but recently their voice has been muted as they were worried about speaking out.

Give the permission to speak out. Get out of the office and go see people.

Then listen.

Then provide the resources for them to do it.

Not everything will work, but prototype fast, and kill even quicker.

Reward trying and pushing for big goals [tip: you don’t today, you fire them]

Listen to customers. Listen to small businesses, partners, analysts.

If the answer isn’t very quickly becoming clear, and very very obvious what steps are needed then you are the wrong guy to fix this, so appoint someone who can, and focus your efforts and helping them.

 

As PC manufacturers suffer in 2011, Apple stormed ahead. Lesson: DESIGN MATTERS

2011 was the second worst year for PC sales in the US.

  • HP fell 5%
  • Dell fell 8%
  • Acer fell 14%
  • Toshiba fell 2%

Q4 figures for 2011 being particularly bad for HP as the botched sale or not of its PC division resulted in a loss of customers confidence and a corresponding fall in sales of 25%.

So, a terrible year all round?

Well … no. Not for everyone.

One company bucked the trend in the US. Increasing sales in Q4 by 18%.

You know the name of course, Apple.

Before you dismiss this, it is worthy of some examination.

In an economically challenged year when consumer confidence fell and jobless figures rose, the company that bucked the trend for sales was a manufacturer of premium products. If you want a computer, whether for work or business Apple is not the cheapest option. Of course, any comparison depends on your requirements, but it would be hard to argue that Apple are the least expensive choice for most requirements.

So at a time when you would expect price sensitive buying the opposite happened.

Or did it?

If you ask look carefully at what people wanted, perhaps this is a clearly predictable outcome.

Instead of focusing (as the PC industry typically does) on chip speeds, memory size, hard drive space, blah blah blah … you focus on long term value, a great user experience, beautiful design, and build quality then you would count out most of the PC industry. Most PCs are functional and provide good bang for the buck, but in the user experience stakes … are awful.

For many people, price will have been critical, so however much they may have wanted an iMac or Air, the price of the Apple world was simply too much, so PC sales have not completely collapsed.

An analyst would point to a number of supporting factors for this: A new operating system, value of Apple stores, strong marketing and the not least the benefits of a very positive brand. They may also talk about a competitors’ lack of vision or the growth of the Apple ecosystem and the resulting pull through effects.

But they would be missing the real driver. All of these matter, but there is a much stronger one.

Anyone who has spoken to a recent switcher from PC to Mac would tell a different story. New to Apple buyers talk about the user experience (they don’t call it this of course), the design, the beauty, the ease of use. Seriously – they do. People who don’t care about computers become attached to Apple products. It happened with the iPod, the iPhone and is pulling through to the desktop and laptop. It is also why Apple dominates the tablet market despite hundreds of much cheaper competitors.

This change is not good news for the PC industry, because most PC makers are really bad at the things that Apple is great at. I don’t just mean poor, or not very good, I mean BAD. Products keep being released with the most basic of design flaws.

Manufacturers scrimp on design throughout the whole process, they cut corners on build quality to save a few cents, install junk-ware which kills speed and offer support that is usually painful for most.

And they wonder why they are losing business?

And here is the bad news. It  is only going to get worse; as people tell their friends, as they become part of the Apple closed wall ecosystem the personal switching costs to go back to the PC increase. With disjointed and badly designed ecosystems  and no added value from competitors they are not even going to be contenders. Talking a good story doesn’t cut it. Most Mac buyers have PCs at home at the bottom of draws that testify to the failure of the PC as a long term investment. The performance slowdown, the problems with rogue code and viruses and the slow start times being ecliped by the Apple experience.

Companies should pray that Apple decides to stay a premium provider, because if Apple decides to go for growth by releasing a lower priced range, then there will be a bloodbath in the PC market.

So is this a fait accompli?

Is the end nigh?

Are there any routes to survive?

How to compete

Option A – innovate product+service

  1. STOP looking only at the product, look at the whole product+service experience from pre- to post- sales
  2. Focus on the experience. Be the company YOU would want to buy from. Fix your service problems.
  3. Find the gaps, segments and customers where you can improve and then innovate, innovate, innovate (the process and experience)
  4. Focus on designing excellent, fun and rewarding experiences (remember, it is not just about the product, but product+service)
  5. Build on these, keep innovating and develop passionate buyers
Difficulty: Hard
Reward if successful: Your business stays alive to grow and has a solid base of buyers. You may be a smaller company, but if executed well should be more profitable and stable.
Answer this question: If I was a buyer, would I buy this? Why? Then test this with real customers.

Option B – Business as usual

  1. Focus on reducing costs to win on price. Fail to develop a service mentality.
  2. Ignore Apple, continue on with business as usual. (You may talk about design, but this is likely to be copying Apple)

Difficulty: Easy
Reward if successful: Cut-throat competition and no ability to value add. Highly volatile business with high costs, ever reducing margins. What you do win will be hard fought and low profit.

Answer this question: Can I control and manage my costs better than my competition? Do I have a predictable and flexible build model?

 

So is the lesson, innovate or die?

No. You can carry on as usual, but are going to find life very challenging. Margins will continue to be under pressure, you will be worried about another competitor making a slightly better product and at a slightly cheaper price, but you can continue. Of course this a challenging life, as you have no long term value to bring. You know this and so do your customers. Should the market suddenly shift, you will be unable to compete.

If you are a PC manufacturer you should be calling Microsoft now and demanding that it pulls its finger out and starts getting products out of the labs and into the OS.

The game is not over yet, but it is not getting easier.

10 other ideas to help:

  1. Hire passionate people – find young smart people and hire them. Then LISTEN to them
  2. Build diverse teams. If you have a team of engineers you will build things may be efficient, but are ugly and will fail in the market. Hire designers, artists and people who care about people.
  3. Travel the world, watch, learn and understand. Embrace ideas.
  4. Start breathing design, understand it, live it, demand it.
  5. Cut your development and prototype timescales, build or partner to be able to quickly prototype. What is your MPT (minimum pro
  6. Release innovative ideas and prototypes – build energy, interest and passion in your company
  7. Test new ideas live, release products under other brands if you need to, make limited editions, test the market with live products
  8. Make feedback as honest as possible, setup user panels, hear the harsh truth first hand, encourage honesty
  9. Find partners … be open-minded and innovative in who these are
  10. Set metrics that encourage innovation and the changes that you want.

So no easy answers or magic bullets (there never are – which is why they are called magic!), but there are options to survive.

One final point to executives in the PC market, whether software or hardware …

Don’t complain about Apple. You could see this was happening. Everyone else did.

Now the question is whether you want to sit back and let this happen, or are going to embrace the challenges and innovate and design a way out of this? Your call.

 

The hardest job in the world … Windows phone product manager

If you are a Windows mobile/phone/whatever 7 or 8 Product Manager, life cannot be easy.

Android announced 3.7m activations over the Christmas weekend of 24th and 25th December 2011

Apple are estimated to have activated 4.58m iOS devices on Christmas Day alone

… and Windows Phone 7 … no data yet, but it is a world away from these figures

Fact: Windows phone is getting a kicking.

These figures cover not just phones but tablets as well, but that doesn’t really matter, because the core fact is that millions of dollars and billions of data points are heading to Apple, Google and the Android ecosystem, not to Microsoft. Yes, I know that Microsoft makes some money from IP licensing fees, but that is missing the point. The mobile platform machine is in full swing, generating cash AND data for Microsoft’s competition. This is not just a problem for today, but also for the future as Google and Apple leverage the platform insights and the data to improve services and create walls around their platforms.

But Microsoft seems unable to halt these two juggernauts in mobile.

Why?

These sales figures are all the more amazing given that Microsoft had a head start of several years on both of these companies and at one time had a 20% share in certain markets with Windows Mobile.

But in a year that has seen RIM and Nokia face collapsing market shares and rock bottom investor confidence, Microsoft has a major challenge ahead in mobile.

An article by Jay Yarow from Business Insider summarises the problem very simply – It’s That The Phones Aren’t That Great. Spot on Jay.

What Microsoft has done has allowed itself to lose the low end of the market (to Android), whilst the user experience, platform and ecosystem simply isn’t good enough to win the high end and effectively compete with Apple. Microsoft may think it can compete. It can’t. Not yet.

Where Microsoft is now is the one place that Harvard Professor Michael Porter famously described as being, ‘the one place you don’t want to be’. The reason is that you can make good products, have good service, and a competitive price, but fail spectacularly. You fail to lead on any area, have no distinguishing innovation and throw money into marketing and development and see absolutely no effect.

Jay offers some ideas, but the challenge facing the Product Teams is deeper than the product features. It needs to define a proposition for Windows Phone in the eyes of customers. Microsoft is not competing against a static competitor, it is competing against a whole industry of providers in Android and the leader in consumer electronics in Apple. The fact today is that Microsoft, it simply isn’t a serious option for buyers, or developers.

For anyone working in Microsoft this is more frustrating that you can imagine. This is because Microsoft is not short of great innovations, ideas or smart people in mobile. Many of the features you seen in Android, in Apple phones and in a range of other mobile solutions were in Microsoft labs years ago. Microsoft labs are full of innovation. Microsoft as a company is innovative. Internally it really is. Not that you would know it as a customer.

The core problem is getting this innovation out of the lab and into products … QUICKLY. A Microsoft release cycle can (and does) take years. This delay means that career Product Managers can avoid taking responsibility for abject failures in the market by moving around and changing roles. By the time a feature has been released it is either already in the market, or has been normalised to the point of banal (read irrelevant) in an effort to avoid offending any other Product Group inside Microsoft (or more accurately any senior Exec from any other group). Lets be clear though, I am not blaming the Product Managers, I am blaming the Executive. The Exec takes the responsibility for the culture inside the company. Product Managers have my sympathy, but this is a two way street. You cannot expect support when lacklustre products fail to sell.

So, the market is dominated by two players (lets ignore RIM because everyone else is for now). It is challenging innovative, well funded agile and successful platform players.

So how do you compete in this environment?

One option is to look at one of the few consumer successes Microsoft has had … Xbox, and more recently Xbox Kinect and see if there are lessons to be learned from this.

Yes, Xbox has had significant problems with early production quality, but it handled this well and has shown with Kinect that it can introduce game-changer products and reinvigorate older platforms. What Microsoft did with Kinect is put innovation at the top of the list and deliver on this. It needs to do the same in mobile. STOP following in the tyre tracks of the competition. STOP allowing them to define the market, and start to drive YOUR innovation into your products. If you need to, commit to production. If you can partner, great, but don’t wait for partners to catch-up. Focus on winning mindshare and market-share before you worry about complete Windows system integration – you can fix this later in software updates. You need integration, but get the consumer proposition right first.

More than anything, answer this question:

The reason I should buy a Windows phone is???

Today I don’t know the answer, and neither do your potential customers. If you don’t believe me, then ask people. I did. I asked friends, and they didn’t know. I can tell you the answer for Apple and Android. I can even tell you the one for RIM. I cannot tell you the Windows Phone answer.

So how can you fix this?

Start looking at this less as a technical problem and more as a customer satisfaction opportunity.

Sell products by making things that do stuff that people want. It isn’t any more complex than that. Ok, it is, but the core point is correct. Start with the user. Live, eat, breathe, their world. And make it better. Solve their problems. Help with with their lives. And do this better than the competition. This is absolutely possible.

5 ways to fix Microsoft mobile:

  1. GET CREATIVE – Employ some designers and start buying up some top talent in the mobile space. Don’t let career old-timer PdMs prioritise features. Leverage their experience, then dump it if it isn’t working. Have some young talent challenge the old guard. Once you have a building, stop corporate Microsoft decorating it. Once you don’t it will be professional, boring, functional, dull and utterly useless as a creative space. Give budgets to managers and delegate. Build cool spaces. This is not about money, but about ownership of creativity.
  2. STAY FOCUSED – Keep the group away both physically and structurally from the rest of Microsoft as you can (I was tempted to say if Ballmer thinks it is a good idea, do the opposite). Seriously, any team needs to stay away from the rest of Microsoft as much as it can. Microsoft is a mature, fiscally disciplined and predictable well managed company. It is everything that a startup group needs to eventually be, but not at the start. Not if the cost of this is a lack of innovation and a delay in delivery (which it is).
  3. BE AGILE – Set aggressive timescales (by Microsoft standards), then halve them. Beat the competition. Simple. Be quicker. You cannot do this following a traditional Microsoft clock. Get a faster one.
  4. INNOVATE – Define metrics that reward innovation and game-changing (there is no point defining metrics that you will miss by a mile such as market share … please). Don’t focus on the product alone, innovate across the ecosystem. CHANGE THE GAME. Normal = waste of time. Look at the work by Doblin to understand this better, but don’t just make a better phone, this is not enough.
  5. TEST – Get the value propositions tested early, and keep testing them and refining them. Write the sales material (not word documents, but living demos and mockups) before you seriously commit to building anything, and test this. And test again. If no one cares or is excited, rip it up and start again. Seriously, test this. Ask yourself why would FastCompany, Wired, NYT, and a million websites want to talk about what you are doing? If you cannot answer this, no one cares. Seriously, they don’t. The most important test yet … test with kids aged 9-19. If they don’t get it, change it.

 

Microsoft is not out of the mobile game … yet, but cannot wait forever to start to get serious about addressing this.

If you need a reminder … try this: Last weekend, 7m prospective customers committed their cash and credit card details and all future revenues to your competition. How much longer before you become a viable competitor?

The clock is running.