On holidays!

I’m about to head off to Thailand for two weeks with my wonderful wife Victoria. I’ve been to Thailand a fair bit over the years, but it’s first time for Victoria, and we’re going to two places I haven’t been before: Hua Hin, a resort area a few hours drive south of Bangkok for some relaxation, then Chiang Mai in the north for some exploration. So this blog is now officially on holidays – back mid-January! Have a fabulous New Year and start to 2006!

Global business and outsourcing

If you happening to be flying Qantas anywhere in the world in the month of January, you can listen to an interview with me on the Qantas radio business channel, hosted by Peter Switzer. The interview was on the general theme of the future of the global economy and followed quite a few different tangents, but probably the most interesting part was about how we should feel about work being outsourced to China, India, and elsewhere around the planet. Work is becoming increasingly specialized, and technology allows business processes to be unbundled into small elements that can be easily integrated. Unless you are truly world-class at what you do, you can’t expect to do well in the long-term. The real value is often in coordinating how the pieces come together to create something new and valuable.

For example, many leading Indian technology services companies, such as Infosys, Tata Consultancy Services, and Satyam, have won contracts to run Chinese software development centers. These companies clearly have the expertise to do this. They weren’t chosen because Indian programmers are cheap, but because these companies know how to manage offshore software development centers. Yet why shouldn’t Australian, or Brazilian, or Singaporean companies do this? It is not an issue of cost, it is about effective project management and client liaison. Those organizations that have excellent capabilities at this level can create far more value than is possible by providing large numbers of inexpensive software developers. The problem is one of mentality. For example, there are any number of great software products developed in Australia and other mid-sized developed economies that are successful internationally. However I see very few initiatives being put together that deliberately draw on global best-of-breed suppliers, and create distinctive and high-value services and products from those inputs. This is where the smaller developed economies need to be playing. It is not about competing where you can’t compete, but about recognizing that value creation will cross boundaries, and positioning yourself effectively in that space.

[Update]: Just found out this is actually airing in February.

The future of robots in an aging Japan

As a highly relevant follow up on my earlier post on emotion-focused robots, there’s a great article in the current issue of The Economist on Japan’s peculiarly propitious environment for robots. With the news just out that Japan’s population has peaked and is starting to decline, it is a particularly pointed issue where workers will come from to drive the Japanese economy. Having lived and worked in Japan for over three years in the early 1990s, I long ago came to the conclusion that Japan would never accept high levels of immigration in the way Western Europe has, and that as a result the long-term future for Japan’s economy looked rather gloomy. The Economist article also affirms that immigration is not seen as an option by Japanese to address labor shortages. However Japan’s significant technological lead in robotics is supported by a lack of “robophobia”; in fact there is a strong enthusiasm for robots in contemporary culture, comfort in dealing with them, and hope for them to help Japan to become self-sufficient in labour. Japan’s very pointed demand to develop robots to replace human labor, and their technological skills combined with plenty of capital, could dramatically accelerate the long-mooted—yet inevitable—arrival of the household robot. [Update]: For example.

Needy and therapeutic robot toys

A group from New York University (NYU)’s Interactive Telecommunications program has come up with an intriguing idea that seems to have struck a chord. Their “Needies” are soft stuffed toys with microprocessors and wireless technology that not only vocally request attention from the people around them and respond well to being petted and held, but actively compete between each other for attention. Jealous Needies may shout out “me, me, me!” or even “throw him!” if another Needy is being held. A video interview shows the Needies in action.

This reminds me of Paro, the Japanese robot seal, which responds to affection (but without the jealousy). It has successfully been tested with autistic and handicapped children and with elderly people, who can respond by becoming more social and interactive with other humans. Other robots are being used for similar therapeutic applications based on human/ machine bonding. While the Needies are intended as novelty toys, there is no question that people will will increasingly form emotional ties with robots. Tamagotchi was just the beginning. When robots are cuddly, responsive, and can speak, real bonds will be formed. A robot nanny that children will love will be here in a basic form in the next few years. Of course it would terrible if people left robots to bring up their children. But emotion-focused robots can and will play a positive role in play, care, and society.

Steps to corporate blogging

So, corporate executives are saying, it sounds like we need to be doing something about this “blogging” thing. So what do we do? According to Marketing Sherpa, there are five steps for major corporations launching blogs: set goals, assemble stakeholders, decide who can blog, write a formal blogging policy, and announce the policy. Sounds sensible, right? Not according to Robert Scoble, the most-read of the 1,000 plus Microsoft employees blogging to the world at large. “Oh joy, we’re going to get more committee-run blogs… Wrong first step, too. The right first step is to read blogs!” Robert provides a link to one of the more outspoken (and unauthorised) Microsoft bloggers, whose disclaimer on his Mini-Microsoft blog reads:

These are sole individual personal points-of-view and the posts and comments by the participants in no way represent the official point-of-view of Microsoft or any other organization. This is a discussion to foster debate and by no means an enactment of policy-violation. These posts are provided “as-is” with no warranties and confer no rights. So chill. And think.

In one recent post, Mini points to problems with the release of Visual Studio 2005, which may have been done before the product was mature. Immediately, Channel 9, the blogging and communication site for Microsoft developers, which is visible to outsiders, took up the issue and debated it. No stonewalling and corporate PR. Customers got to see what Microsoft developers personally thought about it, including strong reservations. Do customers trust Microsoft more as a result? Absolutely. They know they are seeing the reality of the debate, not just the corporate hype. Incidentally, all Microsoft blogs are stated to express personal opinions, not corporate ones.

Yes corporates do need to start with having some clarity on what they are doing, and establish appropriate parameters for blogging. But if this results in exactly the same communication as you get from the PR machinery, why bother? It’s just pretending that you believe in genuine discussions with your community. I should also add that the discussion about corporate blogging over-emphasizes external communication. Blogging is absolutely an immensely powerful tool to improve every aspect of your external relationships, not just in reputation management, branding, and loyalty, but also in areas like customer-driven innovation and quality improvement. However the use of blogs and other social software “inside the firewall” is equally important, as it represents the next phase of effective communication in large organizations, moving on from email and intranets, which today constrain as much as they enable effective collaboration and work.

Update: For a slightly different point of view see this post from former Microsofter Jim Fawcette on how Microsoft’s corporate blogging is helping to steer attention away from “real, insightful, internal criticism of Microsoft… with more bite than gums” such as Mini-Microsoft. Robert Scoble believes he’s the supposed decoy here and says that if that’s his role, he’s failing miserably.

BRW on blogging power

Today’s issue of BRW, Australia’s major weekly business magazine, has an article on “Blogging Power”, which hopefully will contribute to putting blogging and social software on the corporate agenda in the country. After opening with the salutary lesson on how what started with a single blog post brought Sony low, the article quotes me on how Australian corporates are lagging on implementing social software, and draws out this theme throughout the piece. I can’t resist using another quote the journalist Kath Walter took from her interview of me, which I think captures one of the most important issues about blogging and social software (I think I’ve been slightly misquoted here – blogs are in fact an additional source of insight, but the basic point is important):

“People say ‘I haven’t got time to read blogs’, but it is the exact opposite of the truth. Blogs are a very efficient way of filtering information. They are not an additional source of information, they consolidate information.”

The article goes on to look at Telstra’s new “blogging” initiative, which ostensibly has the intent to be authentic. The head of new media at Telstra, Paul Crisp, says that bloggers will be allowed to “challenge and question how the company could work better”. Crisp goes on to say that Sol Trujillo, Telstra’s new chief executive, will not be blogging. “It would be nice if he did, but he has other things on his plate,” says Crisp. BRW is definitely a mainstream business publication, so this piece could help to plant seeds in the minds of Australian senior executives. This blog is featured in the article as one of a small list of blogs to look at – welcome to any visitors from reading the article!

Innocentive and open innovation

I originally wrote about the open innovation model of Innocentive several years ago in Living Networks (see page 12 from selected excerpts from Living Networks). Last week The Economist named Innocentive’s chairman Alpheus Bingham winner of its business process innovation prize for developing the company. Innocentive was originally founded by Eli Lilly, which recognized that the solutions to specific issues in the drug development process may be easier to obtain outside the organization than by trying to do everything itself. By defining specific solutions that it is seeking, it can open participation in its R&D process to any scientist anywhere on the planet. Scientists win a pre-specified reward for solving the problem, and in return sign over the related intellectual property rights. Now other companies including Boeing, Dow, Ciba, DuPont, Procter & Gamble, and Novartis have joined Innocentive to seek their own solutions to R&D problems, helping build the critical mass which makes Innocentive a true innovation exchange. Innovation no longer needs to happen entirely in the one organization. It can be unbundled into different elements, allowing participation from the best and most relevant talent in the world. It is great to see Innocentive’s success, as this will help pave the way to more initiatives and new approaches to opening out the innovation process.

The sorry state of Australian corporate blogging

I am based primarily in Sydney (though I also have US residency and a secondary base in San Francisco to run the US operations of Advanced Human Technologies and for my speaking and consulting work there). As such, I find it extremely frustrating when I find that Australia is significantly behind in the adoption of key technologies. Australia has some fantastic talent, and the best of what is happening here is truly world-class. Yet often this doesn’t diffuse more broadly, notably into the Australian corporate sector, which can be rather slow on the uptake. A case in point is blogging.

It is over 3½ years since I submitted my manuscript for Living Networks, opening with a description of how corporate blogging was changing business. When I spoke at The Blogging Goes Mainstream conference in New York in May of this year, the conference title was describing the reality of the US market. As mentioned in this blog, not just companies like IBM, Microsoft, Google, and other technology companies are blogging, but also generally sceptical Fortune 500 companies such as Morgan Stanley, Boeing, Dresdner Kleinwort Wasserstein, General Motors, McDonalds, Disney, and a whole raft of mid-tier companies across all industries.

In some domains, Australia is doing very respectably in the global blogosphere. A number of Australian-based blogs rank in the top blogs globally, such as Cameron Reilly and Mick Stanic’s The Podcast Network, Darren Rowse’s ProBlogger (and other blogs) and Duncan Riley’s The Blog Herald. Journalists are fairly well represented, with The Bulletin’s Tim Blair, the Sydney Morning Herald’s Charles Wright, the Australian Financial Review’s Mark Jones, and The Age’s Leon Gettler all prominent and dedicated bloggers.

Yet despite this, virtually no major Australian corporations have even experimented with blogs, let alone applied them to useful effect.

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The debate on monetizing eyeballs

At the end of September I wrote a blog post titled Back to Monetizing Eyeballs, suggesting that business models were returning to the good ol’ “monetizing eyeballs” model, driven by online advertising dollars finally reaching critical mass. At the end of November Om Malik, senior writer for Business 2.0 and also author of the excellent Om Malik on Broadband blog, wrote an interesting article in Business 2.0 titled “The Return of Monetized Eyeballs”. (I’m by no means suggesting Om is cribbing my work or is even likely to have seen my post, it’s just this idea is clearly ripe.) However the story doesn’t end there. Jason Calacanis, who recently sold Weblogs Inc., a blogging company, to AOL for a rumored $25 million, disagreed vehemently, and said so on his blog. Where this gets really interesting is that the New York Times then published an article on this discussion, Eyeballs Are Back, Or Maybe Not, describing the to-and-fro between Om, Jason, and other bloggers on whether or not we are back to a world of “monetizing eyeballs”, and what that implies for the tech economy. News is now generated by bloggers. I have seen numerous mainstream media articles that only quote blogs. In which case, why go to the newspaper, which intermediates the news? You might as well go straight to the source, the blogs of the best commentators, who are themselves generating the debate, interacting and reflecting on the most current issues, and providing rich input for us to make up our own minds.

The MySpace Generation

BusinessWeek continues its attention to the unfolding online world with a cover story titled The MySpace Generation. MySpace is the most successful social networking site, boasting 40 million members, and serving an extraordinary 10% of all online ads viewed in October, according to BusinessWeek. People who have grown up in an online world want to socialise in an online world, tapping the immense power of mutual visibility, sharing, and multi-channel communication (of course without supplanting “meat” world interactions!).

Rupert Murdoch demonstrated he was finally a convert to the online world when he paid $580 million for MySpace’s owner Intermix Media in July. Under 25s have little interest in traditional media. Circulation figures for teen publications are plummeting. The only way to capture their attention is to get into the interstices of their immensely rich social interactions. Statistically and anecdotally, far more teens and young adults use MySpace or other social networks than have blogs. The reality is that the individual spaces on MySpace are much like blogs, yet within a bounded domain, and with specific tools to share music and other entertainment, the glue that binds together youth culture. I don’t believe that social networks such as MySpace are overhyped. We are just now getting to a stage where the technology allows easy, media-rich online interaction that supports offline socialising. As social network technologies shrink and enrich our personal degrees of separation, the next generation’s natural habitat is being born.