Differential advantage via technology? It's hard to find that on a shelf

One of the most widespread and influential technologies of the last 40 years that has not only improved business but actually helped create entirely new businesses is the seemingly mundane shipment tracking number.

That crazy-long string of 15 or 20 letters and numbers that somehow, as if by magic, allows you to determine the location and stage in the shipment process of all the crap essential items you order from Zappos, Amazon, or Warby Parker. If you are old enough to remember what ordering goods from catalogs or mail-order was really like before the days of tracking numbers then I think you'll agree how dramatic an improvement it is, and how it enables businesses to make commitments and consumers to make plans.

FedEx who recently celebrated their 40th anniversary, created the tracking number and invented scores of related technologies and processes that surround the tracking number which remains the core of their shipment process today. It is a fascinating story of innovation that you can read about in this recent piece on Wired.com, Tracking 40 Years of FedEx Technology.

The tracking number, and the associated network, communications, applications, and database technologies that make the number accessible and intelligent to the shipper, retailer, and consumer alike truly represents an amazing story of technological innovation. But it is a kind of innovation that sometimes we lose sight of, particularly those of us who talk about things like 'enterprise' software - systems like ERP or Supply-chain, or even HCM solutions. 

The vast majority of these enterprise systems, and the ones that people (mostly) spent time talking about, are commercial off the shelf solutions. A software company has built these solutions, usually with the insights of customers, partners, and their own internal teams of experts, and then attempts to sell what normally is the same exact system to as many customers as they can.  That's the software business, essentially, and it makes tons of sense for both the customer and the vendor. 

For the vendor, developing, marketing, maintaining, and updating one main version of the solution is simpler, more efficient, and over time, allows them to spend more time and R&D on building new features and capabilities, which potentially benefit all customers. And for the customer, having to not be in the business of creating their own custom solutions for things like Payroll, Accounts Payable, collecting job applications, and asset tracking is a huge boon as well. For only a very few specialized companies, none of these things are fundamental to their core business models.

But having these types of enterprise off the shelf systems in place, configured, and deployed can only do so much for an organization when you factor in the these two elements - that the same solutions are available to everyone in the market, including their competitors, and mostly the processes they support are not core to their differentiating value proposition. Or said differently, a dozen of your competitors probably run the same ATS as you, that looks and feels kind of the same, and candidates hate theirs as much as they hate yours. No advantage gained, (or ceded, admittedly). Yes you can do a 'better' implementation of generally available solutions, and that might make you a little faster to process an applications or more efficient at taking payment discounts than the other guys, but these kinds of advantages are mostly tangential to whatever your 'real' business is about.

So if true technological competitive advantage is hard to come by simply from commercial off the shelf software, then where can it come from?

Let's go back to the FedEx example. Here's some idea of where from the Wired.com piece:

FedEx’s 40-year history is about far more than an unimaginable number of overnight deliveries. It’s a case study in creating a service, then pushing technology forward to ensure that service actually works on a large scale. When it absolutely, positively has to be there overnight, you need powerful technology. And sometimes you have to create it.

In its relentless pursuit of efficiency, FedEx has pioneered and developed technologies later embraced by everything from cellular industry to online retailing and distributed computing.

“On a day to day basis, shipping 10 million packages, you have to have technology,” (FedEx CIO) Carter said. Even if that means creating it yourself.

The advantage comes from technology that surrounds the essence of the business model - the fast, reliable delivery of customer shipments. The technology that enables that mission, that others can't easily duplicate, is where and how technology helps lead to real success. And all of it had to be created from nothing.

The FedEx technology story really is quite amazing and a great reminder that many of the real innovations in technology, and the differential competitive advantage that can be derived from them, usually starts from a blank sheet of paper, and almost never can be found on any vendor's shelf.

A simple culture question - How hard is it to get a new pair of headphones?

What do you do if you are at the office and decide you need a new mouse or a keyboard or a new set of headphones because your cube mates won't stop taking conference calls on  their speaker phones? I'm thinking the kinds of items that are more costly than basic pens and paper office supplies things, but not as big a deal as a new laptop or the latest smartphone. You know the kind of stuff that might run $20 or $40 a pop? Is it hard for you or the average employee to get at that kind of stuff? Is there a formal process? Do you require managerial approval? Is there some functionary in IT that determines if you really need the headphones? Does it matter?

Apparently it's not hard at all if you work at Facebook - check this excerpt from a recent piece at Business Insider - Facebook's Electronics Vending Machines Say A Lot About Its Culture - 

The Facebook system is different. No person controls the supplies of the small items. For example, they have nice Sennheiser headphones inside this vending machine. Any Facebook employee can simply walk up, swipe his or her ID card, and grab a new pair. There's a nominal price listed, but employees don't see that number debited from their paychecks or anywhere, really, outside of the IT vending machine. For them, it's simply swipe and go. The system trusts them to use their own judgment about what they need.

Seems pretty cool right? Kind of like those Best Buy mobile vending machines you see at airports except in your office or over by the break room and with all the stuff being 'free'. It's not really free, I get that, and there's no doubt in my mind that someone in Facebook IT or procurement receives and monitors the usage rates and dispensation patterns for these kind of supplies.  But the essential idea or the starting assumption is trust - we trust you know what you need to get your job done, we trust that you won't abuse the system, and that placing unnecessary barriers in your way doesn't help anyone.

It is a simple, maybe dumb example and perhaps I'm reading more into it that is warranted. But I think it's a good question anyway.

I'll ask you - How hard is it to get a new pair of headphones where you work?

Oh and by the way - quit charging your employees for coffee and cokes. 

What matters more than money and other sick day questions

A really quick shot from me today - as I am neck deep in some kind of horrible flu/cold/whatever diseases are floating around the redeye home from Las Vegas on Saturday nights. It is gross. And no fun.

When you are feeling sick and kind of not very productive it is a natural to let the mind wander a little bit - to start questioning what you're doing and second-guess the decisions you've made. For me today the main question I'm asking is 'Who can I convince to come over and make me some chicken soup?'

Organizations too should ask themselves questions, at least that is the premise in an interesting piece on the Fast Company Co.Design site titled 'Forget the Mission Statement. What's Your Mission Question?'. The piece advocates that organizations shouldn't try to craft lofty mission statements that are often vague, shallow, and instantly forgettable, but rather should think more deeply about their cause, purpose, and reason for their existence by answering or at least contemplating several key questions.

Here are the key questions that FastCo recommends organizations should examine when seeking to better understand their mission:

1. Why are we here in the first place?

2. What does the world need that we are uniquely able to provide?

3. What are we willing to sacrifice?

4. What matters more than money?

5. Are we all on this mission together? 

I think you'll agree they are probably valid not just for organizations or corporations to evaluate - even individuals could benefit from a little self-examination as well. What do you think - should organizations take a 'sick day' from time to time and think about these big questions?

Hopefully you won't wait until you are as sick as I am to take the time to think about them as well.

(and please send me some soup)

(and if you do ask yourself these questions and decide you need to find more 'meaning' in your work, check out a site called ReWork, they have a new and interesting approach that might help.

More on the Danger of Hiring for 'Fit'

Late last year I posted 'Work, Play, and Hiring for Cultural Fit', a post that referenced a recent study on hiring published in the American Sociological Review that suggested, essentially, that people tend to hire people that are like them, and they 'get along with', as well as some comments made by some front-line HR professionals at a conference I had attended. While the study, and the thoughts of the HR pros I spoke with last year were both enlightening, I think the ideas expressed in this piece, 'What Your Culture Really Says' on the Pretty Little State Machine blog frames the 'Hiring for Cultural Fit' discussion in the best way that I've seen yet.Pop art American Greyhound - Carol Lynn Nesbitt

It is written specifically to address the challenges and problems common to tech start-ups and other Silicon Valley-type firms, but still resonates more broadly I think. It also is a long-ish piece, and you should take some time to read it all, but I'll pull out the key part about the danger of focusing too heavily on the nebulous idea of 'fit' in the hiring process:

We make sure to hire people who are a cultural fit

What your culture might actually be saying is… We have implemented a loosely coordinated social policy to ensure homogeneity in our workforce. We are able to reject qualified, diverse candidates on the grounds that they “aren’t a culture fit” while not having to examine what that means - and it might mean that we’re all white, mostly male, mostly college-educated, mostly young/unmarried, mostly binge drinkers, mostly from a similar work background. We tend to hire within our employees’ friend and social groups. Because everyone we work with is a great culture fit, which is code for “able to fit in without friction,” we are all friends and have an unhealthy blur between social and work life. Because everyone is a “great culture fit,” we don’t have to acknowledge employee alienation and friction between individuals or groups. The desire to continue being a “culture fit” means it is harder for employees to raise meaningful critique and criticism of the culture itself.

There's lots more in the piece worth reading, and also taking a few minutes to think about your own experiences in your career, and how your organization evaluates cultural fit, relies on employee referrals to staff open jobs, or tends to recruit from the same few universities year after year.

When I first broke into the workplace more years ago that I care to admit, people talked a lot about 'culture' and 'fit' then too. It also had another name - the 'Good 'ol Boys Club'.

Happy Wednesday.

Your customers as characters

Most organizations exist to sell something - a physical product, or some type of service, or a combination of the two. They spend tremendous amounts of time, energy, and resources creating these product/service offerings, perfecting them as far as it is possible, offering them for sale, identifying the target consumers for these offerings, and finally investing varying amounts of additional time, energy, and resources attempting to convince these consumers to make a purchase.

Sometimes it goes really easily for the provider - the product is new, even revolutionary, or it solves a problem in such a new, elegant, and powerful way that the product seems to sell itself. Think the original iPod, or later, the iPad. Or the product has an embedded, loyal, and rabid fan base just waiting to get the latest or newest version of the product. Think a new installment in a successful movie or video game franchise like Star Wars or even Angry Birds.

But for most products or services on offer, the customer needs some convincing - they have time, flexibility, other competitors' options to consider - the 'sale' is certainly not assured, and the difference between winning and losing often comes down to which not (only) has the better product, but which one actually understands the customer's problem more deeply, and can speak more precisely and convincingly about how their solution can solve that specific problem.

I know that sounds really, really obvious and basic, but I think that all too often providers can lost sight of that simple truism - focused too much, and sometimes single-mindedly on the product or service itself, and not how that product or service would actually exist in the customer's environment. Adding one more feature to the product, tweaking some minor element of the service package, or poring endlessly on ad copy, website design, or the 'tone' of the company Twitter account. When the customer has lots of options and choices, these incremental additions or improvements probably do less to sway decision makers than the providers like to think. Once the 'essential' or expected capabilities or services are present, and in a mature market they usually are, the provider that can connect, almost on an emotional level with the customer has the best chance of winning.

How can providers get better at making that kind of connection, and focus more on solving a problem rather than delivering a product?

This piece, about home furnishing provider IKEA's strategic approach offers at least one suggestion:

Göran Carstedt, president of IKEA North America, summoned his top executives to a large meeting room to share his strategic plan. They arrived prepared for a flashy PowerPoint presentation complete with charts and graphs. Instead, Carstedt told them a story about a mother. He depicted a detailed scene of her and her husband getting two kids off to school in the morning. She gets up, makes coffee, wakes up the children, makes breakfast, and so on. Then he paused and moved to the heart of the matter: “Our strategic plan is to make that family’s life easier by providing them with convenient and affordable household items in an accessible location. Period.

Carstedt, in short, wanted IKEA to enter the scene, to populate it with IKEA-supplied usefulness that customers would appreciate having in their homes as they conducted their daily lives. He wanted his executives, in effect, to write IKEA into their customers’ story in a way that improved the story for the characters that populated it. Brilliant! As Carmen Nobel, senior editor at Harvard Business School Working Knowledge, notes, “IKEA has made very clear choices about who they will be and to whom they will matter, and why."

That, in a nutshell, sums up why people might be inclined to go with an IKEA table or dresser or bed, from among the literally hundreds of available options. Thinking more deeply about how their products interact and exist in the flow of their customer's lives allows IKEA to rise above a simple provider of easily substitutable products. Somehow, just by thinking of themselves as a fundamental an important element in a customer's home, they are freed to think more fully, and holistically about the products and how they will play a role in the customer's story.

A good lesson to take to heart I think, for providers of all kinds of products and services.

Happy Tuesday!