All posts by Richard Gayle

21st Century Company

Blindsided by Apple – followed by a poor response

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Analyst Shaw Wu: RIM ‘Blindsided’ by Kindle Fire Pricing
[Via Daring Fireball]

What exactly has RIM actually been prepared for in the last five years? Remember this one, where they thought the iPhone was impossible after Steve Jobs unveiled it?

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Check out the older article from Electronista. All the big competitors, like RIM, Microsoft and toerhs, thought Apple was outright lying about the iPhone. They had all convinced themselves that a large touch screen was impossible without destroying battery life. So none of the thought very deeply about it.

That explains why Google seems to have added touch to its Android OS as an afterthought. They suffered from all three of Clarke’s Laws.

A hallmark of an adaptive, resilient company, one that can survive in the 21st century is to be able to recognize Clarke’s laws and utilize them. Obviously RIM could not and looks to fail.

21st Century Company

Android might always be jerkier than iOS

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Why Android Will Always Be Laggier Than iOS
[Via Cult of Mac]

One of the things that really stands out using an iPhone is just how smooth it feels compared to using Android. Where as Android is laggy, with a measurable interim between when you touch the screen and when the OS responds, iOS almost seems to anticipate what you want to do before your finger touches the display.

How has Apple managed this incredible feat? A better question might be: “How has Google managed to screw up Android’s multitouch so much?” According to Andrew Munn — a software engineering student and ex-Google intern — Android is so messed up that Google might never be able to match an iPhone or iPad’s performance. Ouch!

Before we begin, here’s some background. In the past, it has been said that Android’s UI is laggy compared to iOS because the UI elements weren’t hardware accelerated until Honeycomb. In other words, every time you swipe the screen on an Android phone, the CPU needs to draw every single pixel over again, and that’s not something CPUs are very good at.

That argument makes sense, except if it were true, Android would have stopped measurably lagging in touch responsiveness compared to iOS when Android 3.0 Honeycomb was released. Except guess what? Android devices are still laggy even after Honeycomb is installed on them.

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The problem arises from a fundamental choice the developers of Android made years before the idea of touch even occurred to them They developed the Android to be used with a keyboard or trackball, just as every other smartphone of the time did – no touch.

When using a keyboard or other input, normal priority for the keyboarding tasks could be used. We text so slow that other background processes could take place. No need to give input a higher priority.

But rendering touch well requires a lot of the device’s power, so Apple made sure that anytime you use touch, it gets the highest priority, stopping anything that might slow down the touch interface. As stated in the article:

In other words, every time you touch your finger to your iPhone’s display, the OS literally goes crazy: “Someone’s touching us! Someone’s touching us! Stop everything else you’re doing, someone’s touching us!”

So moving anything on an iPad gives it all the resources the iPad can provide, making sure the movements are smooth.

But Google did not do this because they had to rush their operating system out to compete with Apple. They apparently did not  – or could not – rewrite the system to give touch the highest priority. So now, it gets the same amount of attention from the device as any housekeeping or app driven process.

And it may well be too late to change this without every app already out there to be rendered obsolete.

This is an example of why the well-thought out reasoning of Apple results in a great user experience versus the jury rigged, rushed efforts of their competitors.

21st Century Company

Apple’s net income per employee leads everyone

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Apple’s headcount, up 30%, still industry’s most productive
[Via Brainstorm Tech: Technology blogs, news and analysis from Fortune Magazine » Apple 2.0]

With one seventh as many employees as IBM, Apple generates 13 times more profit

In most recent quarter. Source: Google Finance, Apple Inc. Click to enlarge.

As of September, Apple (AAPL) had 60,400 full-time equivalent employees, according to the SEC Form 10-K it filed Wednesday, nearly 30% more than the 46,600 it reported in Q4 2010.

But those employees generate more profit per capita — by far — than any of Apple’s peers in the industry.

In the quarter that ended in September — not its best, mind you — the company generated sales of $28.3 billion and net income of $6.62 billion, or nearly $110,000 profit per employee.

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Amazon generated about $1500 per employee, almost 10 times less than Apple. In fact, as Apple has gotten larger, its profit per employee has increased.

Since 2008, the profits per employee have gone up almost 3-fold.

How many companies make more money per employee even as they grow? Well, Amazon, Dell and HP make the same amount per employee today as they did in 2008. Microsoft shows a little increase – maybe 20%. Not the almost 300% that Apple has.

Only Google has shown anything close to Apple and it is only up 75% per employee since 2008.

Apple really is some different kind of company. It continues to demonstrate the increasing returns that accrue to 21st Century companies. It also indicates that Apple continues to answer the questions Arthur posed in his paper Increasing Returns  and the New World of Business.

I wonder when others will begin to answer them also.

21st Century Company

Why Google losing sight of search comes at a bad time

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siriby AndersP

How Siri Disrupts Search
[Via Daring Fireball]

Rich Mogull, at TidBITS:

Siri doesn’t replace search, but in many cases it circumvents it by directing users straight to integrated partner services. When you ask for the nearest Indian restaurant there’s still a search taking place, but it’s through Yelp, not a generic search engine that would include Yelp plus various other results.

By skipping the search engine and going straight to a designated source there is no place to insert advertising.

I wrote earlier about the apparent trend of Google to modify search in ways that actually make it less useful. This is a bad time for it to lose sight of its primary product.

Because Siri is about to change mobile search. 2/3rds of mobile search comes from iOS devices. But Siri reduces directed search that Google needs in order to get revenue.

In fact, Siri uses things like Yelp and thus supports their models while Google actually actively works to harm Yelp.

So Apple now has a method to reduce ad revenue that Google is used to getting and to also help Google’s competitors.

I’m thinking that Google shouldn’t aughta have ticked Steve off.

21st Century Company, Web 2.0

Google starts destroying it core product – search

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Google quietly removes + functionality from search
[Via Boing Boing]

It used to be that you could make Google include terms in search results by placing the + symbol before them in queries. Not any more! Writing for Wired, Andy Baio covers Google’s increasing willingness to muck around with your search queries and how to work around it. [Wired]

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It used to be that by adding the “+” forced that word to explicitly be on the page, not in some sort of meta part based on Google’s magic computers.

Now to do the same thing requires twice as much work – placing quotes around everything.

All so it can use the + symbol for Google+ like Twitter uses the hash (#).

The reason Google took over with search are many but one of the basic things was how it combined the words in the search. It allowed very simple control over a search, meaning that the often arcane commands many earlier search engines used became unnecessary.

But as time has gone on, they have meddled with this. I  often do searches where some of the words I use are not found on the page at all. It becomes a worthless search. Putting the “+” in front of a word helped make sure I would find it. Other’s have commented on this exact thing.

Now, to make it more convenient for their social service – which copies other services – they are harming their whole reason for existing.

Because it appears that the branding of “+”  for their social services is now more important than their core product. Companies fail when branding becomes such a core part of their business, especially when it overshadows core business units.

There are already beginning to appear competitors to Google search that may find a large niche here if Google continues to take it eyes off the prize.

I know I will be looking for a service that acts more like the original Google than this new bastard version.

21st Century Company, Cargo Cult Worlds

Jobs’ videos demonstrate how to run a 21st century organization

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He sets up what was wrong with Apple before 1997.

“The total is less than the sum of the parts.” Things had to be restructured. The customer was being led to the altar of tech instead of the other way around. Great engineering, bad management. Focused on the tactics, not on the strategy. Technology did not sell things; what technology could do to help the user is what sold things.

Then he lays out what focussing really is – not saying yes but saying no. And you have to know how to deal with pissed off people.

What happens next is exceptional and simply amazing to see. We are used to almost sociopathic behavior from CEOs. Here we see what a true leader can accomplish, one who can engender the fanatical enthusiasm that Jobs can.

Jobs has a reputation for anger and for being a jerk. But all of us who have spoken in front of a large crowd have had worries about dealing with an angry questioner. Here we have the worst possible one: someone who seems to attack the speaker personally.

But Jobs demonstrates the straightforward approach that makes the Reality Distortion Field such a potent force.

He takes some time – a good 30 seconds before he had figured out his answer – collects his thoughts and pulls back from the exact question to give a much deeper and more important answer to the question.

He speaks extemporaneously for the next 4 minutes, doing many amazing things – putting people at ease, providing background and actually giving away the farm for what Apple will do over the next 15 years.

How many CEOs could have done what Steve demonstrates here? He accomplishes so much in those 4 minutes, all without any real missteps.

It is like a primer for 21st century leaders.

He recognizes the anger out there, recognizes that it is legitimate and wants the audience to recognize that he has not ignored this anger.

“People like this gentlemen are right.” Wow. Admitting that critics are right is one of the hardest things for anyone to acknowledge, much less admit in front of hundreds.

His approach not only defuses a lot of tension – you can almost hear the gasps from the audience when the question is asked – but he provides a huge amount of insight.

He is not ‘putting a bullet’ in these technologies for a whim or because they are bad. They simply do not fit into the strategy he brought to Apple.

They may be great tactics but not for the strategy that Apple will  use.

He shows humility, acknowledging that he has made mistakes in the past. But he does have a purpose, a strategy that guides his decisions.

And then the amazing thing, he tells the world what Apple will now do – something we recognize Apple actually did. He gives away Apple’s great strategic secret. Instead of hiding it like every other 20th century company, he gives it away for free! (at about 2:25).

You’ve got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you are going to sell it.

What incredible benefits can we give to the customer? Where can we take the customer? Not starting with ‘Let’s sit down with the engineers and figure out what awesome technology we have and how are we going to market that’.

He knew then what the strategy would be. And he knew that no other company could execute this strategy, even if they knew what it was.

His strategy is what all 21st century companies have and why the copy cats can not win. They maintain focus on the customer’s needs, not the corporation’s.

Every thing Apple has done since 1997 has been a demonstration of this. Tech specs are not as important as keeping the customer delighted. 20th century organizations focus on tech first. Apple focused on the user.

Thus we had the iMac, the iPod, the Macbook Air, the iPhone, the iPad – each using technology to fulfill what the customer needed.

21st century organizations focus on making the customer’s life better, easier and more useful.

That is why most tablet makers are falling by the wayside. Or smart phone makers. Or laptop makers.

21st Century Company, Web 2.0

The right balance of disruptors and stalwarts is needed

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guard londonby Allan Henderson

People are biased against creative ideas, studies find
[Via Physorg]

The next time your great idea at work elicits silence or eye rolls, you might just pity those co-workers. Fresh research indicates they don’t even know what a creative idea looks like and that creativity, hailed as a positive change agent, actually makes people squirm.

“How is it that people say they want creativity but in reality often reject it?” said Jack Goncalo, ILR School assistant professor of organizational behavior and co-author of research to be published in an upcoming issue of the journal Psychological Science. The paper reports on two 2010 experiments at the University of Pennsylvania involving more than 200 people.

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Stop Ignoring the Stalwart Worker
[Via HarvardBusiness.org]

There’s an unnoticed population of employees in business today. Strangely enough, they’re also the majority.

The diagram below illustrates the labels that organizations often use (knowingly or unknowingly) to classify their employees. The y-axis focuses on how a professional is measured on meeting the organizational performance criteria that fuel the business engine. The x-axis centers on how the professional fares on meeting the expectations of the human engine. In each of the four corners, we find the Stars, Sinners, Low Performers, and Saints. I’ll go into more detail on the four corners of the diagram in my next post, but for now, I want to bring to your attention those falling in the middle of the diagram — the Stalwarts.

DeLong grid 5-1.jpg

These solid citizens make up the majority of employees in most organizations. The odds are you may find yourself among the Stalwarts at some point in your career, no matter how high-revving your internal drive is. If so, you probably will find yourself questioning your significance.

That’s because, despite the number of Stalwarts in an organization, these good, solid citizens of the organization go largely unnoticed. Few leaders think about the motivation, inclusion, and explicit career management of the solid performers. One Fortune 500 leader said, “I thought that it couldn’t be true that so many workers are systematically ignored through no fault of their own (except for the fact that they may not be politically astute or they don’t draw attention to themselves). But the more I reflected on my own company, the more I realized that I spend all my time worrying about the high performers and assume that everything is OK with everyone else.”

These two things are connected. The stalwarts are what I call the doers – the middle of the bell curve that get things done but do not easily take to new ideas. Innovations are disruptive and these stalwarts hate disruption to their routines and processes.

It is hard to be stalwart – to making sure the important basic parts of an organization get accomplished –  if things are changing all the time. A stalwart is the slow moving but determined tortoise to the disruptive hare. In most cases, a company succeeds because its stalwarts make the ideas of the disruptors a reality.

But that does not mean they like it. As I mentioned, the stalwarts do not take to innovation rapidly. They need to be shown by someone they trust from the community – the thought leaders – that it is worthwhile to adopt a new technology or innovation.

A company of disruptors will not get anything done, because there are not enough stalwarts to realize the ideas. But a company of stalwarts will not be innovative, because there are not enough new ideas being presented.

Companies that are run by disruptors – usually many start-ups – do not understand that the stalwarts must be supported. And companies run by stalwarts – usually the more mature organizations –  do not understand that disruptors must be supported.

The two types often do a poor job communicating their needs. So the first article describes what happens with a company where the stalwarts are in charge – an organization resistant to new ideas.

And the second article discusses a problem when the disruptors tolally run things  – those that actually get things accomplished are ignored.

A truly successful, adaptive and resilient company knows how to support both types, has the right balance of each and has identified thought leaders respected by both groups.

These will be the 21st Century organizations that will succeed.

21st Century Company, Cargo Cult Worlds

How Acer’s decline demonstrates Apple’s strength and Microsoft’s future trajectory

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elephantby http2007

Acer suffers first-ever quarterly loss, predicts iPad ‘fever’ will recede
[Via AppleInsider]

Acer reported the first quarterly loss in company history on Wednesday, but the netbook maker’s chairman attempted to convince investors that consumer “fever” for tablets like the iPad will not last.

[More]

This is the elephant in the room – Apple has created a self-sustaining ecosystem that can not be attacked in just one area.

Losses are never a good thing, particularly when Apple is increasing market share. Perhaps this is another example of a company that is simply unable to compete in the ecological niche Apple has created?

The CEO of Acer seemed to keep talking about the iPad but I wonder just how much the Macbook Air has also eaten into earnings?

The number 1 maker of PCs – HP – just left the market. Now the number 2 is getting hit hard and will not be profitable this year.

Not a good sign.

Now Acer is floundering to find some sort of strategy using Android, just as HP floundered last year and bought the webOS for its own tablets. Could we see Acer calling it quits in a year?

These guys – HP, Samsung, Acer, Google, etc. – are all looking at the elephant that is the ecosystem Apple has created and only describing one part – like the leg or trunk –  as though that was all that made the elephant.

“If we make a copy of the trunk, we will be an elephant too.” “Make that look more like its ear and we can win.”

Not going to beat the positive returns Apple gets from its ecosystem.

They still do not get it. And they seem to ignore the fact that now Apple’s huge money flow permits Apple to enhance its ecosystem.

Apple can now bring manufacturers into its ecosystem, paying them hard cash for first use of new technology, for discounted use of technologies and for new facilities that others simply can not do. This is now a win-win for them both as Apple gets the use of technologies that enhance their ecosystem providing them with even more revenue to use.

And the others are brought into the ecosystem  where their business can be enhanced by Apple’s ecosystem. In fact, they can take greater risks because of the support from Apple’s money and actually create new technologies, thus more positive returns.

Positive returns that fall almost entirely to Apple’s bottom line, allowing them to increase the ecosystem. Every manufacturer must be clambering to get a deal with Apple. And if any one of them is unable to meet what Apple needs to support the ecosystem, Apple will find one that will.

So Apple’s positive ecosystem becomes even larger with positive feedbacks to enlarge and strengthen a system that others simply do not have.

According to Arthur’s model, it is now too late for anyone to beat Apple in this ecosystem. The only way to survive is to create a new niche.

The best example for this is Microsoft. At one time, they had the ecosystem and the positive returns that came from that. Apple could not compete and neither could anyone else.

Apple only succeeded by creating a niche that Microsoft simply could not compete with. And Microsoft is stupidly trying to compete in that niche as are all those other companies

It needs to create its own ecology. It has all the pieces.

Instead of trying to come up with a mobile version of Windows, in an ecology that will no longer bring the positive returns Microsoft used to get,  MS should instead look to creating an ecology elsewhere.

Combine its hardware – Xbox/Kinect – with software – games – and bring in easy development tools to move these games to mobile devices – smartphone and tablets . MS would have an ecology that supports positive returns.

I wrote about this back in January. In the Xbox, Microsoft has the ability to create an ecosystem that Apple can not enter right now – gaming hardware that can become almost anything in the future; Kinect that provides a novel input device no one else has; and software control of a captured App economy.

If Microsoft became the best place to make money for game developers, if MS created an App economy for its Xbox/Kinect, if it then leveraged that hardware into supporting the software, MS would create a similar positive return ecology that Apple has created.

Then if it made things so that development for its Xbox allowed developers to easily move games to its smartphones/tablets, MS would have an ecology almost as powerful as Apple, able to produce positive returns.

No other company is in a position to do this right now, although Google may in a few years.

And it might survive then in a post-PC world.

Because a post-PC world is not simply one that is beyond a PC. It represents the epitome of a positive returns ecology, one where every aspect helps support every other one.

Companies need to create entire elephants rather than just copy the trunk.