(book review) Free: The Future of a Radical Price

Free: The future of a radical price by Chris Anderson

(Hyperion, NY-USA, 2009)

Chris Anderson talks about how marketing has evolved in the 21st century and how companies like Google, Facebook and the likes succeed by giving out their products for free. Anderson talks about how companies create great customer relationships by giving out free products. These relationships then help them in earning money at a later point. 

As we switch to the digital era, we are chaging the actual economics of charging for products. As we know, the cost of production for digital products is close to zero. Thus by the laws of economics, the price of the products should fall to zero as well. That is how 'bits' based company give out their products for free. In the bits world, every year producing products gets cheaper because most of the human jobs get replaced by algorithms. It reduces a major part of the production price.

The question this book attempts to answer is how companies make money from the power of "Free"? An interesting question with a number of interesting stories. Overall, a good read. I would recommend it to any one planning to start or wanting to suceed in a 'bits' business and business students.

My team's stints @ the International Business Simulation Competition and our presentation at Netflix HQ

Last month was filled with hard-work and passion. I was involved in two events that made Lucas GSB proud. 

The first event was the 48th International Collegiate Business Strategy Competition - We got a second place in overall performance. I was the CEO of our company - Chronolife. We were a team of 6 people. This was a 4 month long event culminating with a 3 day intensive phase at UC Long Beach. There were schools from US and Canada and we made it to the top, beating some of the premier business schools.

The second event was a competition to come up with strategic solutions for Netflix's current situation. Netflix invited winning teams from Lucas GSB to present at their Los Gatos HQ. I was a part of one of the winning teams - We presented our ideas to some of the Netflix executives. It was a high point for all of us.

I wanted to share these articles from our Associate Dean's blog. It has some pictures from these events. Have a look:

http://lucasgsb.blogspot.com/2012/04/mba-teams-shine-at-netflix.html

http://lucasgsb.blogspot.com/2012/04/lucas-cleans-up-again-at-business.html

(book review) Wikinomics

Wikinomics: How Mass Collaboration Changes Everything by Don Tapscott and Anthony Williams
Portfolio - USA, 2006
 
The book is written by Don Tapscott (named as one of the most influential management thinkers by Thinkers50) and Anthony Williams. Wikinomics directs one towards thinking the enormous oppotunities Web 2.0 has to offer. It focuses on empowered consumers of today (prosumers) who produce and consume services and prodcuts of a company. The main themes/ ideas discussed are innovation throguh open source, sharing, peering and ideagoras. The book continually reminded me of how Linux OS came into being. (They have a discussion about it in the book as well).

I enjoyed reading how various companies succeeded using crowd-sourcing as a strategy and the possibilities opensourcing has to develop cutting edge services. Tapscott and Williams take examples from successful companies like Google, Apple, P&G and more. I personally like how they quote Eric Schmidt in their book -

Google CEO Eric Schmidt told us he hadn't had a product idea in years. “Virtually all of the product ideas in Google,” he says, “come from the 20% of the time employees work on their own projects.”pp260

Its not only external innovation they talk about, but it is also how companies work their way up through internal openness. One point that stood out was collaboration between competitors - an area less talked about.

The book would have been even better if it had a step by step approach on how those companies implemented crowdsourcing. It is educating to read how corporations have used the power of Wikis, Social Networking sites, You-tube or Flickr to mass collaborate and innovate. The book also lacked stories on how companies can/ have gone wrong using these techniques - Wish there was more disciusion on 'pitfalls' of crowd-sourcing.

They also have a website: http://www.wikinomics.com/blog/
I can't wait to read the new book Macrowikinomics by the same authors.

(Ruta Writes...)...Artisan Leadership: Why it is relevant today.

Excellence & creating value are always at the core of a successful business. A leader with an artisan attitude has a holistic view of his work – he not only works on the  practicalities of his job but also on the softer side of his output. He pays complete attention to detail and pushes himself and his work towards excellence.

An artisan knows how to Balance Practical and Aesthetic Quality Standards. He has a passion for his work and passion, cannot be taught. Its either there or its not. You just can not have passion and still be disciplined and dedicated towards your work. That is the reason why the 20% off time in Google works to the company's and to the employees advantage. Google encourages its employees to use 20% of their weekly time (i.e. one day per week) to work on a project they feel passionate about. Not surprisingly, most of the innovations and most of the successful projects come from this 20%. This is because, the employees use this time to do something they feel passionate about.

'Balancing practical and aesthetic quality standards' is not a unidimensional skill.  To be a successful leader in a multidimensional skill, one needs to develop himself as a 'T-shaped individual' as popularized by McKinsey & Co. The vertical axis is the area of expertise for the individual. This is the area he needs to have deep knowledge to make any valuable (traditional/ practical) contributions to the organization. The horizontal axis is where the person develops his soft skills – for example, his aesthetic sense. The business skills I get from my MBA program is going to be the vertical axis of my T. Developing other skills is going to be the real challenge.

Another thing to look at would be how the industry is changing today. Many of the older business models from yesteryears are being rendered meaningless. Today's companies are built around the notion of 'innovation'. All the mundane tasks are usually outsourced to save money. Hence, companies require people from varied backgrounds – Engineers with marketing expertise or architects with finance education. Such individuals are at the edge of innovation. This is a T-shaped individual who can balance practical and aesthetic standards. Today's successful companies do not just make MP3 players, they make iPods. They make things that
not only serve the purpose but things that also add a emotional value. Today, a well established company like Nestle` is using an in-house design methodology to tap into consumer emotions through packaging. The methodology is based on a Japanese technique called Kansei. The technique, mainly popular in the automobile industry focuses on the consumer emotions and feelings as a primary source of design inspiration and translates them into products.  Why does a company do that when it already is selling it products really well? Because, the industry is changing. The consumers are changing. Its not just about the products anymore. Its about the added soft value. This can only be understood and achieved by such employees who can balance practical and aesthetic quality standards.

No education or studies of any sort ever goes waste. They might not come in handy right away, but they will help some day.

(Ruta Writes...) ...Thoughts on leadership & strategy

“Wise leaders know they shouldn't loose their cool, but they must also never let up on their rivals – particularly when their company has an apparent advantage, because a lead can dry up in no time if a competitor finds a new angle or strikes a hidden chord that resonates with the customer. When your opponent is down, never let him up.”

These lines by Libert, B. & Faulk, R. in their book 'Barack, Inc.: Winning Business Lessons of the Obama Campaign' triggered some thoughts about leadership and strategy - 

You cannot out-think or out-play your competitors without thinking beforehand. You have to work towards it, you have to have a strategy. In the business world, its either beat or get beaten. One just cannot get those many lucky breaks. To grow one's business and to hold down competitors, one can not only focus on the short-term bottom line. Sustainability of the bottom line has to be the focus – one needs to develop the ability to think strategically to achieve it. Short-term bottom line affects the outlook of many a people and is one of the biggest issue in businesses. People look at the short-term benefits and discount the sustainability aspect. It is the pressure of the system and people are always under short term pressure. But, to succeed in the long term and to out play the competitors, one must develop the ability to think strategically.

I am not saying that one must have a strategy for every issue. What I am trying to convey is that one needs to enable oneself to think strategically. One should allow a 3 dimensional flow of thoughts when he is trying to solve a problem. When the thinking is inside out, one has only a single perspective – he is the center of the world. You need to learn to look at any issue in a 3 dimensional way – you need to think outside-in too. You can't always be the center of the world.

Business students are tomorrow's business leaders. These students are typically taught to carry out 'position analyses' of various situations. The easiest way to stay in a box is to write down a SWOT – you will never be open to outside opportunities when you are conscious about your strengths and weaknesses. You will never be able to think in a 3 dimensional way. Your business will never take off at 90 degrees! Developing strategic thinking skills is not an option for a good leader.

(Ruta Writes...) Nestle: Brand Evolution Story

Nestle - the World's largest beverage and food company. With the range of products that Nestlé offers – from baby foods to chocolates to confectioneries to health foods, it truly is a lifestyle brand.

I studied the evolution of the Nestle brand as a part of my Branding & Marketing Project. 

Nestlé's “objective is to be recognized as the world leader in Nutrition, Health and Wellness, trusted by their stakeholders, and to be the reference of financial performance in their industry.” It is interesting to see how they have achieved this objective. 

Here is a link to the presentation: http://prezi.com/wva3mnub-g9w/brand-analysis-nestle/

(book review) Linchpin

Linchpin: Are you Indispensable? by Seth Godin
Penguin Group, NY-USA, 2010

I gave this book a second look and ended up reading it again. At first, I did not write a review on this one as I thought everyone knew how great this book was. But then, I realized, there are a lot of people who are not even aware of this treasure!

Seth Godin really is a master of his "art". He mentions the word "art" quite often in the book - it does not pertain to art as in paintings and sculptures but art as in creativity in one's work. Seth explains what a Linchpin is and why Linchpin's are indispensable. He explains that the real world does not have any maps or pointers. If one keeps on looking for direction or a map from someone, he becomes a dispensable resource. Linchpins find their own ways and create their own paths. They bring original and unique creativity into any work they do. That makes them indispensable.

The book is a new maze of ideas and each reader can take numerous paths through it. Godin gets you glued to the ideas in the book.