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Microsoft Is Worth as Much as Apple. How Did That Happen?
Nov. 29, 2018 | The New York Times | By Steve Lohr.

Just a few years ago, Microsoft was seen as a lumbering has-been of the technology world.....the company had lost its luster, failing or trailing in the markets of the future like mobile, search, online advertising and cloud computing.....It’s a very different story today. Microsoft is running neck and neck with Apple for the title of the world’s most valuable company, both worth more than $850 billion, thanks to a stock price that has climbed 30 % over the past 12 mths.

So what happened?

* The company built on its strengths

There is a short-term explanation for Microsoft’s market rise, and there is a longer-term one.

The near-term, stock-trading answer is that Microsoft has held up better than others during the recent sell-off of tech company shares. The more enduring and important answer is that Microsoft has become a case study of how a once-dominant company can build on its strengths and avoid being a prisoner of its past. It has fully embraced cloud computing, abandoned an errant foray into smartphones and returned to its roots as mainly a supplier of technology to business customers.

* It bet big on the cloud and won …
Microsoft’s path to cloud computing — processing, storage and software delivered as a service over the internet from remote data centers — was lengthy and sometimes halting.... it did not have an offering comparable to Amazon’s until 2013. Even then, Microsoft’s cloud service was a side business. The corporate center of gravity remained its Windows operating system, the linchpin of the company’s wealth and power during the personal computer era. That changed after Mr. Nadella replaced Steven A. Ballmer, who had been chief executive for 14 years. Mr. Nadella made the cloud service a top priority, and the company is now a strong No. 2 to Amazon.....Microsoft has also retooled its popular Office apps like Word, Excel and PowerPoint in a cloud version, Office 365......“The essence of what Satya Nadella did was the dramatic shift to the cloud,” said David B. Yoffie, a professor at the HBS. “He put Microsoft back into a high-growth business.”

* … while walking away from losing bets
When Microsoft acquired Nokia’s mobile phone business in 2013, Mr. Ballmer hailed the move as a “bold step into the future.” Two years later, Mr. Nadella walked away from that future, taking a $7.6 billion charge, nearly the entire value of the purchase, and shedding 7,800 workers.

Microsoft would not try to compete with the smartphone technology leaders, Apple, Google and Samsung. Instead, Microsoft focused on its developing apps and other software for business customers. Microsoft products, in the main, are about utility — productivity tools, whether people use them at work or at home. And its Azure cloud technology is a service for businesses and a platform for software developers to build applications, a kind of cloud operating system.

Mr. Nadella’s big acquisitions have been intended to add to its offerings for business users and developers. In 2016, Microsoft bought LinkedIn, the social network for professionals, for $26.2 billion.

“It’s really the coming together of the professional cloud and the professional network,” Mr. Nadella explained at the time.

This year, Microsoft paid $7.5 billion for GitHub, an open software platform used by 28 million programmers.

* It has opened up its technology and culture
Under Mr. Nadella, Microsoft has loosened up. Windows would no longer be its center of gravity — or its anchor. Microsoft apps would run not only on Apple’s Macintosh software but on other operating systems as well. Open source and free software, once anathema to Microsoft, was embraced as a vital tool of modern software development.

Mr. Nadella preached an outward-looking mind-set. “We need to be insatiable in our desire to learn from the outside and bring that learning into Microsoft,” ......“The old, Windows-centric view of the world stifled innovation,” .....“The company has changed culturally.
cloud_computing  kill_rates  Microsoft  outward_looking  Satya_Nadella  Steve_Lohr  strengths  turnarounds  big_bets  walking_away 
november 2018 by jerryking
Novartis’s new chief sets sights on ‘productivity revolution’
SEPTEMBER 25, 2017 | Financial Times | Sarah Neville and Ralph Atkins.

The incoming chief executive of Novartis, Vas Narasimhan, has vowed to slash drug development costs, eyeing savings of up to 25 per cent on multibillion-dollar clinical trials as part of a “productivity revolution” at the Swiss drugmaker.

The time and cost of taking a medicine from discovery to market has long been seen as the biggest drag on the pharmaceutical industry’s performance, with the process typically taking up to 14 years and costing at least $2.5bn.

In his first interview as CEO-designate, Dr Narasimhan says analysts have estimated between 10 and 25 per cent could be cut from the cost of trials if digital technology were used to carry them out more efficiently. The company has 200 drug development projects under way and is running 500 trials, so “that will have a big effect if we can do it at scale”.......Dr Narasimhan plans to partner with, or acquire, artificial intelligence and data analytics companies, to supplement Novartis’s strong but “scattered” data science capability.....“I really think of our future as a medicines and data science company, centred on innovation and access.”

He must now decide where Novartis has the capability “to really create unique value . . . and where is the adjacency too far?”.....Does he need the cash pile that would be generated by selling off these parts of the business to realise his big data vision? He says: “Right now, on data science, I feel like it’s much more about building a culture and a talent base . . . ...Novartis has “a huge database of prior clinical trials and we know exactly where we have been successful in terms of centres around the world recruiting certain types of patients, and we’re able to now use advanced analytics to help us better predict where to go . . . to find specific types of patients.

“We’re finding that we’re able to significantly reduce the amount of time that it takes to execute a clinical trial and that’s huge . . . You could take huge cost out.”...Dr Narasimhan cites one inspiration as a visit to Disney World with his young children where he saw how efficiently people were moved around the park, constantly monitored by “an army of [Massachusetts Institute of Technology-]trained data scientists”.
He has now harnessed similar technology to overhaul the way Novartis conducts its global drug trials. His clinical operations teams no longer rely on Excel spreadsheets and PowerPoint slides, but instead “bring up a screen that has a predictive algorithm that in real time is recalculating what is the likelihood our trials enrol, what is the quality of our clinical trials”.

“For our industry I think this is pretty far ahead,” he adds.

More broadly, he is realistic about the likely attrition rate. “We will fail at many of these experiments, but if we hit on a couple of big ones that are transformative, I think you can see a step change in productivity.”
adjacencies  algorithms  analytics  artificial_intelligence  attrition_rates  CEOs  data_driven  data_scientists  drug_development  failure  Indian-Americans  kill_rates  massive_data_sets  multiple_targets  Novartis  pharmaceutical_industry  predictive_analytics  productivity  productivity_payoffs  product_development  real-time  scaling  spreadsheets  Vas_Narasimhan 
november 2017 by jerryking
How to Avoid the Innovation Death Spiral | Innovation Management
By: Wouter Koetzier

Consider this all too familiar scenario: Company X’s new products developed and launched with great expectations, yield disappointing results. Yet, these products continue to languish in the market, draining management attention, advertising budgets, manufacturing capacity, warehouse space and back office systems. Wouter Koetzier explores how to avoid the innovation death spiral....
Incremental innovations play a role in defending a company’s baseline against competition, rather than offering customers superior benefits or creating additional demand for its products.
Platform innovations drive some market growth (often due to premium pricing rather than expanded volume), but their main function is to increase the innovator’s market share by giving customers a reason to switch from a competitor’s brand.
Breakthrough innovations create a new market that the innovator can dominate for some time by delivering new benefits to customers. Contrary to conventional wisdom, breakthrough innovations typically aren’t based upon major technological inventions; rather, they often harness existing technology in novel ways, such as Apple’s iPad.......A recent Accenture analysis of 10 large players in the global foods industry over a three-year period demonstrates the strategic costs of failure to innovate successfully. Notably, the study found little correlation between R&D spending and revenue growth. For instance, a company launching more products than their competitors actually saw less organic revenue growth. That’s because the company made only incremental innovations, while its competitors launched a balanced portfolio of incremental, platform and breakthrough innovations that were perceived by the market as adding value.
Accenture  attrition_rates  baselines  breakthroughs  correlations  disappointment  downward_spirals  howto  incrementalism  innovation  kill_rates  life_cycle  portfolios  portfolio_management  platforms  LBMA  marginal_improvements  Mondelez  moonshots  new_products  novel  product_development  product_launches  R&D  taxonomy 
march 2016 by jerryking
Four ways to harvest value from ‘failure’ - The Globe and Mail
JOE NATALE
Special to The Globe and Mail
Published Wednesday, Feb. 04 2015

Here are four ways to bring tuition value to life in your organization:

1. Reward the blunt and the honest.

2. Make sure everybody has some skin in the game...Reflect upon our successes and our failures and, most importantly, to share and study them and create a constructive dialogue within their teams. Creating tuition value only works if it becomes everyone’s responsibility.

3. Know when to fold them. We have heard many times that it’s important to fail fast, and yet too many organizations take far too long to put a bullet in projects that are going nowhere.

4. Pump up the volume of your customer’s voice.
attrtion_rates  failure  lessons_learned  value_creation  customer_feedback  feedback  reflections  kill_rates  skin_in_the_game 
february 2015 by jerryking
From healthy fries to segways: Why most products fail - The Globe and Mail
SUSAN KRASHINSKY - MARKETING REPORTER
The Globe and Mail
Published Thursday, Sep. 18 2014,

The vast majority of new product launches end up failing.

In fact, 72 per cent of new products are failures, according to a global study released by Bonn, Germany-based marketing consultancy Simon-Kucher & Partners. The firm surveyed 1,615 managers in 40 countries. It found that most newly launched products fail to meet their profit targets “because companies neglect or ignore essential pricing and marketing activities in their new product development processes.”.... set aside a budget for research to measure customer demand for the product, as well as what people are willing to pay for it......So many products are launched that haven’t established basic things, such as research into the need of the product, the efficacy of the product, testing the product with consumers,”

marketing a new product:

1. Is there a market for the product?
2. Can you own the name?
3. Do you have data that prove the idea has merit?
4. Do you have a credible, knowledgeable spokesperson who can talk about the product?
5. Have consumers or customers used the product and will they talk about their experience (hopefully positively)?
6. Have you had everyone you are talking to sign an NDA (non-disclosure agreement)?
7. Can you identify a third party who can corroborate that the world needs this product that will go on record?
8. How long will it take to manufacture the product and will you meet the deadline for the market (season, trade show, holiday)?
9. Do you have money to capitalize the manufacturing and launch of the product?
10. Do you have a business plan and a budget?
11. What is your day job and can you do both?
attrition_rates  stage-gate  failure  marketing  Susan_Krashinsky  new_products  product_development  products  product_launches  kill_rates 
september 2014 by jerryking
Bob Pittman of Clear Channel, on the Value of Dissent - NYTimes.com
By ADAM BRYANT
Published: November 16, 2013
discussing an idea, “What did the dissenter say?” The first time you do that, somebody might say, “Well, everybody’s on board.” Then I’ll say, “Well, you guys aren’t listening very well, because there’s always another point of view somewhere and you need to go back and find out what the dissenting point of view is.” I don’t want to hear someone say after we do something, “Oh, we should have done this.”

I want us to listen to these dissenters because they may intend to tell you why we can’t do something, but if you listen hard, what they’re really telling you is what you must do to get something done....“You’ll never be fired here for making a mistake. You’ll be fired for not making a mistake. Because if you’re not making a mistake, it tells me that you’re not trying anything new.”...“Weed the garden.” If you try 10 new things and, just for example, two are clear winners and two are clear losers. That means you’ve got six in between. What do I do with those? Most organizations — and when I’m not careful, including me — let everything live except the clear losers....only going to let clear winners live. I’m going to take the resources I put for the other eight things and try again,”...

Urgency wins. There are times when people come in with a presentation, and I’ll say: “What is it you want from me? What is the decision?” I find 70 percent of the time, I don’t need to know any of the other stuff. I’ll just say, “Do this or that” and we’ve saved 50 minutes. Although it may come across as impatience, it really allows us to move faster.
Clear_Channel  attrition_rates  CEOs  dissension  impatience  portfolios  kill_rates  momentum  operational_tempo  urgency 
november 2013 by jerryking
Four Lessons from Rockstar Games: The Innovator...
September 18, 2013 | Quora | by Ross Simmonds [Life & Pixels]
(1) Give The Customers What They Want - When you focus on giving your customers what they want, the media and customers will do the talking for you. Creating an impact doesn't happen by saying you're going to make one. It happens from actually doing it.
(2) Don't Be Afraid To Break The Rules - In business, it's more important than ever to push boundaries. To be successful, you need to do things that other people question but you know is going to be right for your clients, partners, employees or customers. As the world gets smaller, the importance of pushing boundaries and striving for greatness is at an all-time high. When you're thinking about how your business can generate some additional press or how you could win new business - think differently.
(3) Don't Be Afraid To Kill Your Bad Puppies - It's the idea of killing something that is at the core of what makes you feel uncomfortable....In business, the initial stages of customer research and product development are just one part of the puzzle. As you build your business and establish a client base, you're required to make more decisions as new opportunities arise with your business growth. Decision making quickly becomes a key part of your job as you're forced to make choices on a daily basis...It's our obsession with the past and our own creations that hold our businesses back from continuing to evolve and grow.
(4)Take Pride In The Entire Experience--A great business is one that sweats the little things. It's a business that focuses on the minor details and ensures that their entire business is built on the idea of an experience....At the end of the day, you can get excited about using Instagram for a new promotion or work relentlessly on developing a great content marketing strategy but if your product sucks, you'll fail. The key for business success is to be mindful of these four lessons as you build your business and strive to make it grow.
lessons_learned  culling  customer_satisfaction  execution  detail_oriented  games  rule_breaking  customer_centricity  videogames  kill_rates  Pablo_Picasso  innovators  hard_work  think_differently  stage-gate  attrition_rates 
september 2013 by jerryking
Sanofi head sees cures for what ails Canada’s pharma sector - The Globe and Mail
Jun. 16 2013 |The Globe and Mail | SOPHIE COUSINEAU.

Canada and Quebec, where the country’s pharmaceutical R&D is concentrated, must also adapt quickly to the downsizing of in-house research.

“The business model has changed not only for financial considerations, but because the science has shifted,” he said. “It has become so complex that no single organization has all the disciplines to be successful.”

The collaborative approach that Mr. Viehbacher has tried to instill at Sanofi since he took over the company in late 2008 relies on creating an ecosystem like the one found in Boston, where the company acquired rare-disease specialist Genzyme Corp. for $20.1-billion (U.S.) in 2011.

In Boston, researchers from universities, biotech firms and pharmaceutical companies often work together from the get-go, in a public-private partnership, or PPP, culture. Big pharma doesn’t wait around to pick the biotech fruits when they are ripe. “We can accelerate the development or, in certain cases, kill a project earlier, so that resources can go elsewhere,” Mr. Viehbacher explained.
attrition_rates  stage-gate  pharmaceutical_industry  Montreal  CEOs  Sanofi  competitive_landscape  patents  intellectual_property  PPP  partnerships  Sophie_Cousineau  accelerators  kill_rates 
june 2013 by jerryking
Identify new growth niche and how you can profit
March 19, 2013 | Financial Post | By Rick Spence.

Sparks: What other companies need unlikely solutions? How could you help them with data management, management of perishables, or guaranteeing consistent quality?
Sparks: What niche information markets could you develop and own? Or, what services could you offer to celebrity startups that have everything except business experience?
Spark: Retailers are eager to lock up new brands to differentiate themselves. How can you help more marketers achieve a competitive advantage?
Spark: What other marginal products and businesses will tech giants such as Google and Facebook drop next? How can you help users adjust? Or, what under-performers should you be trimming from your own product roster?
Sparks: Designers and builders should target early adopters eager for a colour makeover.
Spark: Where else can you find a business whose margins are so huge that Buy-One, Get-Three-Free makes sense? Or, when big names are offering value propositions like this, how can you retool your promotions and sales to compete?
Spark: How could you solve major problems like these without a supercomputer?
Spark: Gadgetry is changing so fast that even markets you thought had stabilized are wide open to new ideas. How can you use hot new technology to disrupt your industry?
Rick_Spence  growth  niches  entrepreneur  kill_rates  IBM_Watson  massive_data_sets  celebrities  ideas  entrepreneurship  new_businesses  solutions  disruption  under-performing  early_adopters  competitive_advantage  perishables  information_markets  adjustments  data_management  culling  differentiation  retailers  brands 
march 2013 by jerryking
Bubbling Up
January 2005 | Worth | Sergio Zyman.

We changed the formula we had been using for 100 years to give our customers what we thought they wanted: New Coke. We orchestrated a huge launch, received abundant media coverage and were delighted with ourselves until the sales figures rolled in. Within weeks. we realized that we had blundered. Sales tanked and the media turned against us. Seventy-seven days New Coke was born. We made the second-hardest decision in company history: We pulled the plug. What went wrong? The answer was embarrassingly simple: We did not know enough about our customers. We did not even know what motivated them to buy Coke in the first place. Based on that, we fell into the trap of imagining that innovation—abandoning our existing product for a new one would cure our ills. After the debacle, we reached out to consumers, and found that they wanted more than taste when they made purchase. Drinking Coke enabled them to tap into the Coca-Cola experience, to be part of Coke's history and to feel the continuity and stability of the brand. Instead of innovating. we should have renovated. Instead of making a product and hoping people would buy it, we should have asked customers what they wanted and given it to them. As soon as we started listening to them, consumers respondcd, increasing our sales 9 billion to 15 billion cases a year.
Coca-Cola  Pepsi  market_research  marketing  renovations  growth  CMOs  product_launches  kill_rates  brands  customer_expectations  customer_insights  culling  mistakes  beverages  innovation  contra-innovation 
may 2012 by jerryking
How to Be Like Apple - WSJ.com
AUG. 29, 2011 | WSJ | RACHEL EMMA SILVERMAN. Driving
Innovation: Mgmt. experts say there are specific ways firms can generate
and execute new ideas. Solicit input. Great ideas come from all levels
of the organization, not just the top. Provide workers time for
"unofficial activity," set time to work on creative ideas. Executing
ideas is often tougher than generating them. Companies need a clear
process to prioritize, resource & test ideas quickly and cheaply, so
that they can afford to experiment...Observation can help companies
understand not just what people say they want, but what they really
need. Clay Christensen says P&G's new-product success rate in recent
yrs. came from observing that people were concerned about how their
clothes smell (Febreze) & were always looking for simpler ways to
clean the floor (Swiffer.). P&G overhauled its new-biz strategy
after realizing that just 15% of its ideas, developed in more of an
ad-hoc approach, were meeting revenue & profit targets.
Apple  innovation  execution  Vijay_Govindarajan  P&G  business_development  Clayton_Christensen  new_products  kill_rates  success_rates  systematic_approaches  ad_hoc  new_businesses  slack_time  companywide  observations  experimentation  primary_field_research  large_companies  Fortune_500  brands  unarticulated_desires  Michael_McDerment  ideas  idea_generation  process-orientation 
august 2011 by jerryking
Technology Devices Either Sell Big or Die Fast - NYTimes.com
August 23, 2011 | NYT | By JENNA WORTHAM & VERNE G.
KOPYTOFF. In recent years, technology companies have been cutting their
losses with increasing speed...These days, big technology companies —
particularly those in the hypercompetitive smartphone and tablet
industries — are starting to resemble Hollywood film studios. Every
release needs to be a blockbuster, and the only measure of success is
the opening-weekend gross. There is little to no room for the sleeper
indie hit that builds good word of mouth to become a solid performer
over time. ...this accelerated lifecycle of high-end hardware is being
described as “Darwinian.” ...Companies kill new products more quickly
now because of the higher cost of staying competitive, ..The crush of
tech bloggers and Twitter-using early adopters .. raises the stakes
around how well new products perform in the marketplace...One needs
everything in place: the content, the applications and the
experience--to have a reasonable chance at success. [JCK: "everything in place" = ecosystems]
accelerated_lifecycles  attrition_rates  blockbusters  content  culling  Darwinian  ecosystems  hits  Jenna_Wortham  kill_rates  mobile_applications  new_products  product_development  product_launches  social_media  smartphones  speed  tablets  UX  winner-take-all 
august 2011 by jerryking
Seth's Blog: The Scarcity Shortage
Aug. 27, 2007 | Seth Godin.

Scarcity has a lot to do with value. Scarcity is the cornerstone of our economy. The best way to make a profit is by trading in something that's scarce.

How to deal with the shortage of scarcity? Well, the worst strategy is whining--about copyright laws/fair trade/how hard you've worked. etc. Start by acknowledging that most of the profit from your business is going to disappear soon. Unless you have a significant cost adv. (e.g. Amazon's or Wal-Mart's), someone with nothing to lose is going to offer a similar product for less $.....So what's scarce now? Respect. Honesty. Good judgment. L.T. relationships that lead to trust. None of these things guarantee loyalty in the face of cut-rate competition, though. So I'll add: an insanely low-cost structure based on outsourcing everything except your company's insight into what your customers really want to buy. If the work is boring, let someone else do it, faster & cheaper than you ever could. If your products are boring, kill them before your competition does. Ultimately,
what's scarce is that kind of courage--which is exactly what you can
bring to the market.
scarcity  Seth_Godin  customer_loyalty  respect  judgment  honesty  whining  trustworthiness  inspiration  entrepreneurship  proprietary  cost-structure  relationships  kill_rates  courage  customer_insights  insights  competitive_advantage  low-cost 
october 2010 by jerryking
Are You Killing Enough Ideas?
August 27, 2009 | Strategy + Business | by Zia Khan and Jon
Katzenbach. Companies can improve their innovation performance by
getting their formal and informal organizations in sync.
stage-gate  attrition_rates  innovation  ideas  exits  kill_rates  failure 
august 2010 by jerryking
Chapter_1.1_Catalyst_for_Growth.
Many corporations are not prepared to institutionalize
corporate entrepreneurship. There are no benchmarks, metrics or
performance criteria for corporate entrepreneurship. Many executives do
not know why new initiatives succeed or fail. A failure rate of fifty
percent for new initiatives is deemed acceptable.
stage-gate  attrition_rates  intrapreneurship  corporate  failure  filetype:pdf  media:document  success_rates  criteria  new_businesses  new_products  large_companies  brands  metrics  benchmarking  kill_rates 
april 2010 by jerryking
Fire Yourself -- Then Come Back and Act Like a New Boss Would
OCTOBER 9, 2006 | Wall Street Journal | by CAROL HYMOWITZ.
..."companies must repeatedly reinvent themselves to stay
strong...companies can't survive as they once did by churning out the
same products or services in the same way year after year. The most
successful companies don't wait until they're in trouble or are
overtaken by rivals to make changes. The trick is to analyze portfolios
constantly, to move quickly to shed weak businesses and to gamble on new
opportunities without making the company unstable...."Windows of
opportunity open and close so quickly today, you can't just mull
decisions right in front of you. You have to look around the corner and
figure out where you need to go,...learn how to change directions fast.
...
IBM  Intel  Andy_Grove  reinvention  opportunities  nimbleness  speed  agility  windows_of_opportunity  accelerated_lifecycles  portfolios  pre-emption  kill_rates  portfolio_management  unstable  instability  assessments_&_evaluations  Carol_Hymowitz 
december 2009 by jerryking
Ping - How Google Decides to Pull the Plug - NYTimes.com
February 14, 2009 NYT article By VINDU GOEL on how Google
evaluates budding projects, its key tests for continued incubation, its
use of its own employees as a test bed, and its use of product-specific
blogs to communicate and listen to, the public.
attrition_rates  stage-gate  Daniel_Pink  Freshbooks  decision_making  business  innovation  Google  exits  trial_&_error  commercialization  projects  kill_rates  test_beds  assessments_&_evaluations  Communicating_&_Connecting  testing  blogs  new_products  Michael_McDerment  culling 
february 2009 by jerryking

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