Friday, March 29, 2019

E2C vs. E2E

You've probably heard terms like B2B, B2C, and B2G.

Have you heard of E2C and E2E?

E2C  =  Employees who service customers

E2E  = Employees who service other employees (internal customers)

I coined these terms because, in my experience, especially at large companies, internal customers are not treated with the respect given to external customers.

Internal customers have to jump through more hoops, suffer from more lousy service and delays, and often have to put up with sub-par user interfaces and computer systems.

This ultimately harms the entire business.

That is why, in my Strategic Simplicity® Framework, even though user simplicity is often regarded as "making the (external) customer's life easier", my definition of user simplicity includes applying it to internal customers (employees).

Take the Strategic Simplicity® Diagnostic

Strategic Simplicity® Diagnostic:  Rank yourself and your products/services in each of these areas on a scale from 1-10:

They will help you identify the key changes that result in dramatic improvement.

1. Change Simplicity - Do you break changes down into phases, chunks, and micro-projects that can be iterated? Do you apply analog vs. digital thinking?

2. Market Simplicity - What big idea or theme do you want your product or service known for? What one thing do you want to focus your marketing on? Internally, is there alignment (with context) between business and technology?  Is strategy translated into roadmaps, goals, and plans?

3. Decision Simplicity - How easy is it for prospects to decide and evaluate among your offerings? Is it easy for them to see the value of your products compared to those of competitors? Does your product portfolio overlap and cause confusion? Internally, do your employees have the data and context to make the correct decisions?

4. User Simplicity - Once a prospect decides to become a customer, how easy is it for them to buy, use your product, and take advantage of sales and servicing?Consider your employees to be (internal) customers: do you provide them with user simplicity to do their jobs?

Scoring:  You want to be at least an 8 in each area.  Ideally, you can always improve in each area—even if you are a 10.  Improvement in any of these areas can dramatically increase success!

Sunday, March 24, 2019

Longevity: Broccoli vs. Hot Cocoa

This weekend's Wall Street Journal had the obituary of the scientist who proclaimed broccoli a super-food, with cancer-fighting properties.  He lived to be 95, which is impressive.

But, next to that, they had the obituary of the guy who invented Swiss Miss Cocoa.  He lived to be 101!

When Politics Affect Business Projects

I recently read that the court battles over whether to include a citizenship question in the upcoming census are threatening to reduce the profitability of the contract to print the census—which was awarded to Chicago-based printer R.R. Donnelley.

Donnelly has a strict deadline in which it has to deliver the census forms but, because of the on-going litigation in Washington D.C., they can't start printing until it is sorted out.

Meeting the deadline will thus increase their expenses (cutting into their profits) because they will have to use extra presses and possibly pay over-time.

This reminds me of a consulting project I did for Ameritech (a baby Bell) back in the mid-to-late '90's.  Then, the issue is that Ameritech wanted to get into the long distance market but, in return, the FCC required them to open the local phone market to competition.

This meant that competitors, such as AT&T or MCI, would "buy" local service at cost from Ameritech and re-sell it to the public.  So, customers could have their phone service with MCI, but in actuality they would be installed and supported by Ameritech

We were designing a strategic solution to allow this.  It basically meant setting up a software application that competitors could use to set up customers for installations, service, etc. which would then be sent into Ameritech's existing service system.

However, we kept having to make changes as the lawyers for both sides hashed out requirements in court.  Each new court decision brought changes, which resulted in re-work and delays.

Friday, March 22, 2019

Who should a CSO/CISO (Chief Security Officer / Chief Information Security Officer) Report to?

I have been a CEO, interim CIO, and now am a management consultant. I recommend to my clients that the CSO/CISO role be set up as a peer of the CIO. They should, therefore, have the same reporting structure as the CIO (CEO or board). The reason that the CISO should not report to the CIO is because the CIO has competing responsibilities (pressure to reduce costs, keep up with technological change, deliver business as usual, and work with the CMO / business units to deliver innovation). In today's environment, security and information privacy can not be part of a trade-off. A company needs a CISO who can push back and make sure that up-to-date security and data protection are implemented, regardless of competing priorities. The CISO needs his own team of security architects / auditors who can examine new and existing applications, give them regular checkups, and offer prescriptions for security best practices.

Password Best Practices

1. Don't be afraid to create long passwords.  It's better to write down secure passwords than try to memorize short ones.  Keep passwords written by hand on paper which you can keep secure in your home office.  Don't save unencrypted passwords on your computer or online.

2. Passwords should always contain uppercase, lowercase letters and numbers.  If allowed, also consider using symbols such as ! or %.  

3. A good way to generate long passwords are to select 2 or more unrelated words, connect them with numbers, randomly capitalize some letters and, finally, adding a special character.  Example: We can combine giraffe and tennis into giRaffe43tEnnis24!

Thursday, March 21, 2019

Sherlock Holmes: Master of Deduction? or Abduction?

In Conan-Doyle's stories, Sherlock Holmes, the world's greatest detective, was a "master of deductive reasoning".

But, actually, he was an expert at abductive reasoning, because Holmes combined observations with known facts.

The 3 forms of logic reasoning:

1. Deductive:  Using facts to go from the general to the specific.  Example: Oceans have salt water, the Pacific has salt water.  Therefore, the Pacific is an ocean.

2. Inductive: Using facts to go from the specific to the general. Example: The Pacific is an ocean.  The Pacific has salt water.  Therefore, all oceans have salt water.

3. Abductive: Combining an observation with a known fact, to draw a probable conclusion. Example: I see that this body of water is salty.  Oceans have salt.  Therefore, this body of water is an ocean.

The difference between Deduction and Abduction is that the former involves only using known facts, while the latter involves both observations and facts.

Tuesday, March 19, 2019

"I'm a Website Developer for Left-handed, Blue-eyed Texas Dentists Who Walk With A Limp" - The Epidemic of Over-Niching

The internet is full of "marketing experts" telling business owners to niche down! niche down!

You can become a big fish who owns a little pond.

Well, this is good if you want to provide a commodity service.  But, if you want to Think Big, and be a real, innovative thought leader who provides expert advice to the leaders in your industry, then you need a different model.

If a left-handed, blue-eyed dentist (with a limp) was my client, was serious about success, and wanted to hire the above web designer for anything than basic commodity work, I'd tell him to run away fast!

That specialist is a one-trick pony.  He won't be able to provide you with innovative, cutting-edge strategy, because he or she has no exposure.

You don't want to be a content expert, and now more and more about less and less.  You want to have wider exposure, so you can bring insights from one field to another.

This doesn't mean you become a jack-of-all-trades either.

This means that you need to specialize in a process, not content.  My mentor, Alan Weiss, has a mantra: "generalize and thrive", and recommends specializing in a set of general results—not specialized methodology.

A good example would be an expert French chef, Italian chef, and Chinese chef.  They each run world-renown restaurants, and all offer chicken dishes.  Now, suppose that you knew how to locate, select, and buy the best chicken in any market.  You could consult with all of them and improve their business—even though they know more about their content than you.

You can't teach them French, Italian, or Chinese cooking, but you can improve the quality of their chicken.  That is the power of a process expert.

Cabs vs. Uber: Can Legacy Companies Strike Back At Data-Driven Disrupters?

As a strategy consultant, I've worked with many clients on using data to drive innovation/disruption.

What I have found is that it is very hard for companies to disrupt their own basic underlying business model—they are just too habituated with certain assumptions about business as usual.

However, existing companies are capable of using data to disrupt portions of their operating model, and are willing to do so—especially in the customer-focused parts of their business.  However, this is usually done defensively, after the real disrupter has entered the market.

Thus, in general, existing market participants are capable of enough disruption to survive longer than companies that stick to the status quo, but ultimately they won't be the front-line leaders in the future because it is almost always a new entrant that causes true strategic disruption—someone who can mentally start fresh, with minimal assumptions about business as usual.

For example, Uber disrupted the whole model of the taxi industry, by creating a market place of matching independent drivers and riders.  Uber's model is that they don't have a central dispatching organization, or a large capital investment in taxi medallions or vehicles.

Since then, a taxi company in the Chicago area that I've worked with has competed by using data to disrupt parts of their business.  For example, they now have an app which lets you hail a cab easily, matches a car, sends you the car info, and lets you pay and rate the driver. They also ask if you have TSA Pre-check, and drop you at the closest door. This company, however, could never have disrupted the entire model like Uber did.  They are still dedicated to employing drivers, owning cabs, and having dispatchers.

Cloud Alphabet Soup: SAAS vs. PAAS vs. IAAS

There are three main types of cloud services:

SAAS (Software As A Service) - This is an application that is completely developed and users simply log in and use it.  For example, Netflix or

PAAS (Platform As A Service) - This is when you need a certain platform, such as a database.  You want to program the database, but not manage the underlying operating system, memory, etc.

IAAS (Infrastructure As A Service) - This is when you want to develop your own applications, but don't want to own your own servers, network, memory, etc.  This is the most powerful and flexible for developers, because it gives them full control to create their cloud applications.

IAAS benefits companies because they don't have to invest large amounts of time and money to set up their own computing environment.  This is especially valuable when a company is first launching a new application.  They can develop the app, upload it to their cloud provider, and then only pay as customers use their app.

IAAS has the potential to be more secure than a company's own computing environment, because cloud vendors specialize in security, upgrades, and computing best practices.  This is their central business, while companies that try to set up their own network are usually more focused on their actual business (i.e. accounting or banking).

However, IAAS vendors provide a lot of security options to their customers, and it is up to the companies to make sure that they choose the most secure option, not the easiest to set-up.

Future Trends
IAAS trends for the near future include dramatically increasing their storage capacities, and providing support for more non-computer consumer and industrial devices (the Internet of Things).

Monday, March 11, 2019

Why some health system mergers fail, while others succeed

Healthcare mergers are focused on three keys: cost efficiencies, culture compatibility, and systems integration.  A failure in any one of these areas can doom the merger.

A successful merger will reduce operating costs and improve margins.  This is very good for stakeholders.  For patients and the community, it depends on the circumstances.  If the hospitals were relatively healthy and now, through reduced competition, keep prices high and don't pass any of the cost savings on to patients, it can impact the community negatively.

On the other hand, if one or both hospitals are weak financially, and in danger of cutting back service, then a merger to create a more financially healthy hospital will benefit patients and the community.

What's the single best way to simplify interoperability in healthcare IT?

The single best way to simplify interoperability in healthcare IT is to create the medical record equivalent of the pdf format, which is the standard for documents.  

Once there is a single format that has the flexibility to store any medical record, without loss of information, users of healthcare IT systems will demand that their vendors add the ability to import and export these files.  

Then we will have simple interoperability—the same way that we do with documents through pdf files.

Sunday, March 10, 2019

What's in a Name? Beyond The Yottabyte

Here's a lesson from science that can apply to your business:

This weekend's Wall Street Journal had an article about how a leader at the UK's National Physical Laboratory wanted the international standards committee to work on new suffixes for large quantities.

Currently, after megabytes, gigabytes, and terabytes come petabytes–followed by the suffixes exa, zetta, and yotta. He thinks that, in 10-15 years, the amount of worldwide computer data will exceed 1 yottabyte.

The manager is afraid that the public will invent their own terms, and that the danger is that some of these catch on and become de fact names.

This is the lesson for your business.  Do you name/brand all your services, intellectual property and techniques?  If you don't, your customers and prospects might invent their own terms and you lose control.

Friday, March 8, 2019

2 Tips on developing the mindset of an Entrepreneur

Get Bored Easily
As a management consultant, I have found that my most entrepreneurial clients get bored quickly, and seek to continually reinvent themselves. They test out new products / services, and drop old ones when they get bored.

Turn Problems into Opportunities
The best example of this tip is the famous 1930's jazz pianist Art Tatum. When he would travel for performances, he would often find that the piano at the night club or venue would have broken keys, or be out of tune. Rather than get upset however, Tatum would get excited! He would spend the day incorporating the flaws into his music, and would end up giving an improvised, one of a kind performance. This is a must-have skill for entrepreneurs! Problems are always occurring. Intead of simply fixing them, and getting back to the status quo, the best entrepreneurs recognize an opportunity for innovation, and improve the product or service beyond the old normal.

Is AI 'really really stupid?

As a consultant who advises companies on strategy—including technology and AI startups, I can tell you that AI is very good at mining data for insights, but it is "dumb" by human standards because it's incapable of making intuitive leaps or insights.

For example, there was a case where a technology company used an AI tool to sort through resumes.  Most of the resumes were from men.  A human leader would see this, and think "how can we attract more women into technology?".  The AI, instead, started automatically rejecting resumes from women.  When the company found out, they had to stop using the AI.

Lessons for Recent College Grads

Two things I did right:

1. In my senior year, I chose to work on a project for Engineering Open House. This one extracurricular activity was critical, because it attracted the attention of a very small, very technical start-up company with only 6 employees. After college, they hired me as employee 7.

2. Choosing to work for this very small company rather than a Fortune 500 company. At very small companies (less than 20 employees), new graduates get exposed to much more responsibility, and a breadth of functions, than at a large company.

Pros and Cons of a multi-cloud strategy

Instead of sticking to one cloud vendor (such as microsoft or amazon), there is now the option for multi-cloud. 

These are layers of software, such as containers and micro-services, which can sit on top of different cloud provider's APIs, so that developers can write their applications once, with a uniform interface, and deploy them on multiple clouds without having to make and support vendor-dependent modifications.  

The advantage is flexibility—you aren't tied to one cloud vendor. A major con is that, since multi-cloud tech is evolving so fast, you can be left with a skills gap if you can't retain talent.

Thursday, March 7, 2019

Don't Let Your Business Become a Victim of it's Own Success

Here is the link to my article:

Is freeium technology a good business model for tech companies?

I am a strategy consultant who has worked with technology companies considering the freemium model.

While there have been some notable successes with the freemium model, most companies that implement it do not succeed because only a very small percentage of users ever become paid customers, and the gap between free and paid customers become too great.  When this gap occurs, the company can't recoup its recurring expenses.

There are 3 better alternatives:

1. The best is the free trial model, where the company offers a free trial of their complete version and, after a certain amount of time, the user must leave or convert to a paid customer.  

2. The application is free, but there are one-time purchases.  This model works very well for mobile games.  This model is different than freemium because it does not depend on a small subset of users becoming ongoing subscribers.  Instead, because purchases are one-off, a higher percentage of customers will buy on occasion.

3. The application is free, but consulting / services are offered for a fee.  In this case, since consulting / services command a higher fee than subscription charges, companies that elect this model have a much better chance to cover expenses, and generate a profit.