I personally believe our world, especially with so many feature rich products, is getting more complex every day. So, when I hear about simplifying products by removing features, I certainly applaud the action. However, there is a right way and a wrong way of managing features, especially when these features are already been introduced to the field and are in use by your customers.

Today, Netflix announced a removal of a key feature (at least it is key to me): multiple profiles per account. This valuable feature allows us to maintain several queues, one for each member of our household. For whatever the reason, Netflix has decided to remove this feature, and their FAQ is below. Note that Netflix is not providing any explanation, or an alternative to allow for an easy transition.

Jeff Lash of How To Be A Good Product Manager has a well written article on how to address feature removal from your product: Do not be afraid to remove features. Looking at Twitter traffic on this topic, Netflix product manager should be reading Jeff’s blog and revisiting this decision.

Should features be removed, and products be simplified? Absolutely! However, before one goes crazy over removing existing features, there needs to be a cost/benefit analysis and a good plan to handle the migration issues.

We will be eliminating Profiles, the feature that allowed you to set up separate DVD Queues under one account.
When? Profiles will be eliminated on September 1, 2008.
Why? While it may be disappointing to see this feature go away, this change will help us to continue to improve the Netflix website for all our customers.
Do I need to do anything? Consider moving all DVD titles in your Profiles Queues to your main account Queue. To do so, log-in and visit this page
How will this impact my account? On September 1, 2008:

• All DVDs currently at home or in transit will be associated with the main account Queue
• All Profiles rental history will be added into the main account rental history
• Your additional Profile Queues will be eliminated. If you would like to keep a copy of each
• Profile Queue we recommend that you print them out
• Prior to Profiles going away, we will also email you a copy of your Profile Queues
• Profiles movie ratings and Profiles Friends connections will no longer be available
• You will not be able to transfer your Profiles data to a separate new account
• You will be able to set a maturity filter on the main account

Technorati Tags: netflix, product management

“The only winning move is not to play” is what WOPR concluded after playing endless drawn games of tic-tac-toe against itself in the movie WarGames. By recognizing the simple cause and effect relationship and learning that sometimes there are no winners, WOPR demonstrated its system thinking, its big picture thinking thereby saving the world.

While the traditional form of analysis focuses on taking apart the individual pieces of the whole to be studied, systems thinking focuses on the whole itself: interactions and interdependencies that takes place between what is being studied and the system it is part of. By expanding the view of the system, more interactions and interdependencies can be identified and analyzed. This expanded view could result in a different conclusion than anticipated through traditional forms of analysis, especially when the system is complex with numerous interactions, internal or external.

Perhaps the importance of systems thinking is best seen in nature. There are numerous case studies of introducing non-native species to new regions for one purpose or another. The Cane toad was introduced to Australia to control sugar cane pests, but instead are now declared as an invasive species in Australia, and are a serious threat to native biodiversity. Along the same lines, Scotch Broom was brought to Pacific Northwest to be used as a garden ornamental. Unfortunately, this bush has bloomed out of control and is now considered an invasive specie in Washington and other states.

Just like the environment, your firm is a complex organism and a living system. As with any system, you need to understand and manage the internal and external interactions and interdependencies to be successful. As I mentioned before in Innovation Process: 3 Things You Can Count On, innovation is an effect in economy and society. To avoid being referred to as an invasive species, you need to incorporate systems thinking, big picture perspective, into your innovation process. How you internally manage your innovation process, how you handle the interactions and interdependencies between your idea generation, strategic planning, resource allocation, competency development and more is just as important for your success. By managing your innovation as a system, internally and externally, you increase the chances of your success.

Below are some tools to help you sharpen your systems thinking. I would love to hear about your tools, and what works for you and your team.

• Apply the 5 Whys: As painful as it is at times, I do enjoy the Why? questions that my son asks. Asking Why? helps one to move from the immediate symptom to cover the underlying problem, and thereby identify potential resolutions to the issue at hand. Just make sure in the process, you are focusing on facts and not opinions, as your goal is to identify potential actions that you can take. Opinions, finger pointing and such are just explanations that do not lend themselves to solutions. If you do happen to get an explanation, ask again Why else could it be? Each Why? question will take you to a different perspective, different context and expand your system further, opening up new possibilities and potentials.
• Use scenario planning and stories: Write stories about the potential futures of your innovation. Then use these stories to capture relationships, interactions and interdependencies between various parts to build the view of the whole system. As you build your story, focus on the type of relationships: supportive, limiting, negative, unintended consequences, … Each of these could then feed into your risk management process, your assumption validation and other parts of your innovation management cycle as appropriate.
• Leverage the power of diversity: In order to uncover hidden relationships and capture the impact of interdependencies you need a diverse team of experts, skills, experiences and perspectives, i.e. a cross-functional team. Bear in mind that as your scenarios and stories expand, so should your team, including potentially suppliers, partners, customers, analysts, … Be flexible with your team structure and be open to signs when you need to reevaluate its membership.
• Stimulate your creativity: I enjoy shuffling through Roger von Oech’s Innovative Whack Pack. Regardless of which card I pick, it offers a new insight and wisdom that I need to incorporate into my thinking.
• Compile a portfolio of analysis tools: Porter’s 5 Forces,life cycle analysis tools, cause-and-effect diagrams, TRIZ, value chain analysis and others can help bring a systems perspective to your thinking.
• Improve your collaboration and change management skills: Systems thinking is about interactions and interdependencies, and how things behave within the whole, internally and externally. It is about recognizing these interactions and changing or managing them accordingly. So, sharpen your collaboration and change management skills to improve your overall effectiveness.

Finally, establish regular checkpoints. As I mentioned before, we are all part of a complex organism and a living system. As you launch your innovation, you will need to continuously monitor and examine the system and analyze if its behaving as expected. If the results are not what you anticipated, then review and adjust. In a way, it is all an experiment.

Technorati Tags: systems thinking, big picture thinking

I realize that times have changed… However, I did not internalized the amount of change until my neighbor’s 14-year-old said “I love everything wheat!” And it is not just her; my 10-year-old prefers whole wheat over Wonder Bread. I might be living in a community where there is more sensitivity towards environmental, social and health consciousness. However, I bet there are more communities around the world such as ours. And, those are not the only trends that are shifting. You are probably wondering, what does this have to do with innovation or technology management? Let’s break these trends down; jump in with your own observations and insights.

Going green and ethical consciousness

These days, it seems like every other ad in a magazine is about a firm’s greenness and their new environmentally friendly products or processes. Though the ads might be a fad, the growth of environmental and social consciousness is certainly not. Our new generation is observing the negative impact we have had on our environment, on earth’s natural resources and overall society first hand. That consciousness and society’s learnings are here to stay.

My son recently shared his view on space travel: “We have to find a new planet to colonize, as the human race will be extinct given what we have done to the environment.” I hope it is not as black and white as he sees it.

Let’s not forget ethical consciousness. The Internet, always-connected technologies and social networks have significantly increased the degree of transparency firms once had. With that, consumers are more knowledgeable and demand more from your firm. MIT Sloan Management Review recently published a study on Does Being Ethical Pay? (may require subscription.) The study shows that consumers are willing to pay a slight premium for ethically made goods, and would buy unethically made products only at a steep discounts. The Women of The Buyer’s Army is taking activism to the next level as highlighted in the Ode Magazine. Their mission is to raise shoppers’ awareness on how various products are made.

Your mission, if you decide to accept it, is to incorporate green technologies, environmental and ethical consciousness into your organization’s DNA. Right now your customers are demanding it, and tomorrow your workforce will be joining them too.

Talent management

I can’t help but share my observation on the hypocrisy of some of the CEOs out there, in this case Mark Hurd… Anyone that is plugged into the US business news is aware of CEOs’ concerns on dwindling US tech talent. Though I haven’t seen a study, I wouldn’t be surprised to see a cause-effect relationship between early US outsourcing trends to current US graduates in the technology field. However, the part that really bothers me is when a CEO complains about dwindling US tech talent on one breath, and then reduce his US workforce in large numbers in another breath.

So, let’s focus on the real issue at hand. It is NOT that the US doesn’t have talent, it is either not the right talent or not at the right price. Given that, along with accelerated technology shifts and US visa procedures, your talent management strategy has become even more relevant.

In search for a meaning

Maybe the generations are in crisis, or finally we are learning there is more to life than just work. Either way, as average life expectancy increases, so does the need for that life to be more meaningful and purposeful at every aspect of our lives. I should know, as I am one in search of meaning.

As a manager, you might already be experiencing these shifts in your workforce. Changes that have been taking place just from the perspective of technology alone have been amazing, mainly driven by kids that never experienced a world without the Internet, have no clue what a floppy drive looks like or why would anyone want to use such a thing in the first place Where the communication is driven by text messaging, instant messaging, emails and MySpace. But even more so, these kids are interested in knowing the purpose, understanding their impact and ensuring a world that is healthy and happy. At the same time, you might be dealing with Generation-Xers that are going through their own career shifts to find that purpose and meaning.

These personal shifts create an interesting challenge for managers: how do you motivate and reward your employees? How do you create growth opportunities that are aligned with their own purposes? How do you ensure the meaning they are looking for matches yours? And, how do you keep those employees?

Our opportunities are global, so are our problems

Globalization is here to stay. No doubt, it has fueled the growth of many firms and improved the lives of many. Unfortunately, it is also highlighting the ever increasing divide between the rich and the poor. (Superclass: The Global Power Elite and the World They Are Making) Lets not forget terrorism, global warming or outbreak of a contagious disease.

As Albert Einstein pointed out “We can’t solve problems by using the same kind of thinking we used when we created them.” We need to increase our global reach by building virtual teams around the world. So far this activity has been mainly fueled by firms driven to reduce operational costs. However, we need to shift towards building cultural and social awareness of global communities, and bring that to our product and technology planning activities.

Finally, NIMBY (Not In My Back Yard) doesn’t have a relevance in today’s global world. We can’t pretend that just because something doesn’t immediately impact us, we don’t have to care about it. The Story of Stuff highlights in a fun way how everything we do is connected. As consumers we are becoming more aware of how our purchasing decisions are shaping the world we live in. As businesses, we need to take to heart the concepts of: sustainability, zero waste, clean production, renewable energy and a more fulfilling purpose that fuels meaning for all.

Technorati Tags: globalization, sustainability, green

It was the best of times… It was the worst of times… No worries, not when we have strategic agility.

Just as strategy’s roots come from the military with Sun Tzu, the foundations of strategic agility are thanks to Napoleon. By incorporating mobility and flexibility (corps d’armée system) combined with strong communication channels (communication backbone of marshals), Napoleon revolutionized the war strategies of his time. He recognized time as the key strategic element for his success, and gained a competitive advantage by identifying ways to dynamically organize and structure his attacks based on the latest information from the battlefront: a classic example of marrying strategic planning with strategic agility.

I don’t need to point out that our business environment has changed. For some, it might even feel a bit like a battlefront. Every day it is increasingly competitive, with an abundance of information available instantly to everyone, where constantly evolving technologies accelerate the commoditization cycle, not to mention we may be at the brink of an economic depression. With that, every strategic plan has the opportunity to become obsolete overnight, along with what was once your competitive advantage and differentiation. As they say, never a dull moment.

How well and how fast you predict, foresee, adjust, adapt and exploit opportunities in this ever changing environment defines your strategic agility quotient. With that, strategic agility is not just a nice to have. It should be embedded into your culture, your business processes and organization, and you should make it a key core competency and capability to enable continuous value creation for your company.

To foster strategic agility, you need to invest in many facets of your organization.

• Management by Objective (MBO): Originally rooted in HP’s management philosophy, MBOs are a great way to align your workforce to the ever-changing needs of your organization.
• Change management: Your efficiency and effectiveness at mastering change initiatives and handling uncertainty will improve your speed of execution and the flexibility of your organization.
• Communication backbone: Everyone in your organization needs to understand your business and the context for its success. Through this, they can understand the key triggers to watch, to act upon and more importantly their role for making it happen.
• Organizational learning: Your culture not only needs to embrace new and different, but also learn from past experiences.
• Organizational processes and structure: Without a well understood set of processes, new information and knowledge will be lost within the organization. Without an organizational structure that can effectively act on new information and knowledge (prioritization of projects, resources, …), one would be left wishing that the information was never observed.
• Organizational talent: With your HR team, you need to grow and recruit the needed talent and experience to execute for the future.
• Environmental scanning: Build in habits and provide tools for your organization to look for future trends. But don’t stop there; encourage communication and incorporation of your findings into future plans and activities.
• Ecosystem capabilities: You need to extend beyond your organization, to your ecosystem, and build capabilities and a communication backbone for faster response: customer relationship management, supply chain, distribution chain, manufacturing, IT, …
• Maintain a healthy balance: As with everything, you need to maintain a balanced view between adaptiveness, responsiveness, speed, cost, quality, functionality, brand and customer care.

Though strategic agility is a 2-word phrase, building the capability and skills to be strategically agile is more complex. Think of it as a pyramid of capabilities that build on each other, extending beyond your organization’s boundaries. You can utilize this framework to assess your strategic agility. Does your organization and your ecosystem have the intent, the focus towards scanning the horizon and beyond, and to what degree and depth? Do you have the right behaviors to support the intention: avoidance of analysis paralysis, creative analysis, systems thinking, the curiosity to explore and understand? Does your organization and ecosystem extend beyond now to understand new patterns formulating on the horizon, and work collectively to decode the hidden messages? Does your culture welcome new ideas and thoughts at every level? Do you have the processes and structures to make the necessary adjustments and strategic course corrections efficiently and effectively?

Strategic agility is not for everyone, at least not to the same degree. But, recognize that globalization and the speed of change is requiring every industry to embed some aspect of strategic agility into its core in order to survive, even if your sole differentiation is based on operational excellence. So, get to know thyself. Analyze your risk profile, communicate your key boundaries for decision making (hurdle rate, % of customers impacted, resources impacted, ..) and define your key change triggers that your organization must be aware of (new technology, new entrant, shifts in the economy, customer trends, …). Whatever your solution, make sure you are not the frog slowly being brought to a boil…

Technorati Tags: strategic agility, fostering strategic agility

Whether we you call it a knowledge-based, idea-based or innovation-driven economy, our firms’ value is more and more driven by our intangible assets. Dr. Robert Shapiro captures this quite eloquently in NDN’s Globalization report, “The Idea-Based Economy and Globalization: The Real Foundations of American Prosperity in the 21st Century.”

This shift is evident in the way U.S. and international investors value America’s public companies. In 1984, the market value of the physical assets of the top 150 U.S. public companies – their “book value” – accounted for 75 percent of the total value of their stocks. A firm was worth nearly what its plant, equipment and real estate could be sold for. By 2004, the book value of the top 150 U.S. corporations accounted for 36 percent of the total value of their shares. Nearly two-thirds of the value of large companies now comes from what they know and the ideas and relationships they own.

Intangible assets include things that are created through time and effort: trade secrets, copyrights, patents, trademarks, source code, know-how, organizational competencies (technologies, databases, culture, capacity for innovation), business processes , company brand, customer loyalty, and not to forget your skilled and trained workforce, i.e. human capital, all contribute to your intangible asset portfolio. Though these are not physical assets that you can see and touch, they can positively effect your bottom-line and the valuation of your firm. Here are some examples:

• Famous brands: Lexus, McDonalds, …
• Coco-Cola’s formula: Merchandise 7X
• Famous logos: Apple, Google, BMW, Nike, …
• Amazon’s customer review database, Google’s search database
• Trademarks: Kleenex, iPod, Trinitron, …
• IBM’s patent database

As important as these assets are, in most cases, management of them are an afterthought. Just like anything else, intangible assets require active management to support, to build and to grow in order to maximize their value while keeping the overall cost down. At the same time, for a variety of reasons, it is difficult to properly manage these valuable intangibles.

• Challenges of putting together an effective measurement system to track the performance of the intangible assets.
• Not spending adequate time to understand your core business, its key performance drivers and how they are linked to your intangible assets. But don’t stop there: learn to how to legally protect them.
• Only focusing on your intellectual property, and not properly analyzing/including your source code, know-how, business processes, workforce skills/expertise, …
• Neglecting to put together a risk management plan for your intangible asset portfolio to defend as well as advance your leadership position.
• Solely focusing on defensive moves while forgetting to find ways to nurture and grow your intangibles.
• Intangible assets may not have direct tangible impact, and very likely complement other intangible assets, such as the case with workforce training in software quality that eventually improves revenues through increased customer satisfaction.
• Treating your intangible asset analysis as a one time activity, and not managing them as part of your strategic business cycle.

To manage your intangible assets, start with identifying them and determining how they are linked to the success of your strategy and your competitiveness. Perhaps tools such as the cause-and-effect diagram can help narrow down the field while keeping it meaningful, relevant and long-term focused. Balanced Score Card performance metrics can also help to incorporate your intangible assets with your strategy.

Next, put in place a tracking and measurement system to monitor the progress of your intangible assets. Since it can be challenging to put together an effective system, keep it simple and start small. As I mentioned before, make sure your metrics are clear, actionable, support business objectives, and based on data and facts. Finally, build internal awareness for your most valuable intangible assets.

Technorati Tags: intangible assets

There are many books that discuss success and how to think and be successful… There are many business books that highlight the importance of opportunity cost (and sunk cost) evaluation in strategic planning… But I know of only one book that merges the two, and redefines success with the idea of strategic quitting.

Seth Godin’s book The Dip: A Little Book That Teaches You When to Quit (and When to Stick) is short and effective. It certainly made me question the wisdom of “Never give up, never surrender!” In many ways, I followed Seth’s logic when I left Amazon.com after 5 months of employment. Quitting is an emotional process, otherwise my decision would have come 2 months earlier!

Seth’s book doesn’t offer a recipe for determining if something is worthwhile to quit. That is a process of self-reflection where you ask yourself: will it/I be remarkable, will it/I be best in the world, or in my case “is this what I want to be known for?” You have to determine those questions for yourself, based on your definition of success.

Strategic quitting is key to aligning yourself towards success, but making sure not to quit too early while in The Dip is also Seth’s message. Yes, getting through The Dip is hard, and that is the point: “The Dip creates scarcity, scarcity creates value.” And, value is created when you lean into the Dip, where you push harder and change the rules. Not when you just chug along…