Tuesday, November 27, 2012

Why people matter and so does the shape of your office

https://www.mckinseyquarterly.com/Strategy/Innovation/Innovation_lessons_from_Pixar_An_interview_with_Oscar-winning_director_Brad_Bird_2127  (registration required)

The McKinsey article, Innovation lessons from Pixar: An Interview With Oscar-Winning Director Brad Bird, struck me as the rare business article that has value.

In my own experience of managing teams and developers, I have believed that morale counts. Involving teams and creating enthusiasm is magical in its impact. I recall talking with a friend, John Plank, who has directed over 50 Broadway and off-Broadway shows. He commented to me that, "Direction is not about telling people what to do. Rather it is about assembling the right team. With the right team magic happens." This is an insight that most people miss. A CEO's role is typically more about assembling and motivating the right team. Nowhere is this more true than in high tech companies where judgment about highly specialized and changing technologies needs to be integrated with changing market needs.

Like any good CEO, Bird has the experience to look at problems from many perspectives. A good CEO must not run from technology. He must relish it and he must understand how technologies are developed, how features are prioritized and traded off against other features.

Other writing about Pixar have suggested that it was located in Emeryville to keep the notoriously hands-on (some would say interfering) Steve Jobs from wrecking the company. But the interesting insight from this interview is the role of the office space and architecture. Unsurprisingly to me, but surprisingly to many in Silicon Valley, giving private offices to developers increases productivity (research suggests that interruptions to a developer when he is deep in a problem may cause a 45 minute or more delay before he or she can return to the same level of involvement in the problem space). But importantly, mechanisms such as creating traffic to a central location and creation of interactions with others is also important. Cross training in apparently irrelevant skills to a current task also has both short term value (creating interactions with different skilled people) and long term value (creating more interesting, skilled and capable people as employees), besides the obvious benefits of exciting employees, keeping them involved and growing.

Wednesday, October 24, 2012

Curious commentaries on Apple's new mini iPad

In roving the Internet, I am sometimes astounded at the comments people make.

A case in point: with yesterday's announcement of the Apple mini iPad, there have been many comments by pundits, columnists and regular people about the relative merits of the mini iPad, the larger iPads and the iTouch, and their relative positioning vs. Android phones and tablets.

What seems to be missing in all these analyses is a simple strategic observation: as markets become bigger, there are more opportunities for segmentation. Reading on an e-Ink reader from Amazon addresses a different set of needs than a more video oriented tablet. A tablet used on the go requires a different form factor than one that does not travel off the couch.

And as prices go down, the propensity of people to have more than once device goes up.

And given that tablets, phablets, music/internet devices such as iTouches and iPods, and smart phones can be supported by different business models, pricing is likely to be difficult to analyze unless you take into account the full life cycle profitability of the relationship. Smart phones are subsidized to the tune of $200-400, but may generate a service revenue of $1500-2400 over the life of the phone. Low end tablets may generate advertising revenues in the case of Google and product/service purchases in the case of Amazon or Barnes & Noble.

As a result, many of the discussions assume that everyone has similar needs, or makes similar trade offs. That seems like a bad assumption.