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jerryking : tacit_knowledge   7

The path to enlightenment and profit starts inside the office
(Feb. 2, 2016): The Financial Times | John Thornhill.

Competition used to be easy. That is in theory, if not always in practice. Until recently, most competent companies had a clear idea of who their rivals were, how to compete and on what field to fight.

One of the starkest - and scariest - declarations of competitive intent came from Komatsu, the Japanese construction equipment manufacturer, in the 1970s. As employees trooped into work they would walk over doormats exhorting: "Kill Caterpillar!". Companies benchmarked their operations and market share against their competitors to see where they stood.

But that strategic clarity has blurred in so many industries today to the point of near-invisibility thanks to the digital revolution and globalisation. Flying blind, companies seem happier to cut costs and buy back their shares than to invest purposefully for the future. Take the European telecommunications sector. Not long ago most telecoms companies were national monopolies with little, or no, competition. Today, it is hard to predict where the next threat is going to erupt.

WhatsApp, the California-based messaging service, was founded in 2009 and only registered in most companies' consciousness when it was acquired by Facebook for more than $19bn in 2014. Yet in its short life WhatsApp has taken huge bites out of the lucrative text messaging markets. Today, WhatsApp has close to 1bn users sending 30bn messages a day. The global SMS text messaging market is just 20bn a day.

Car manufacturers are rapidly wising up to the threat posed by new generation tech firms, such as Tesla, Google and Uber, all intent on developing "apps on wheels". Chinese and Indian companies, little heard of a few years ago, are bouncing out of their own markets to emerge as bold global competitors.

As the driving force of capitalism , competition gives companies a purpose, a mission and a sense of direction. But how can companies compete in such a shape-shifting environment? There are perhaps two (partial) answers.

The first is to do everything to understand the technological changes that are transforming the world, to identify the threats and opportunities early.

Gavin Patterson , chief executive of BT, the British telecoms group, says one of the functions of corporate leaders is to scan the horizon as never before. "As a CEO you have to be on the bridge looking outwards, looking for signs that something is happening, trying to anticipate it before it becomes a danger."

To that end, BT has opened innovation "scouting teams" in Silicon Valley and Israel, and tech partnerships with universities in China, the US, Abu Dhabi, India and the UK.

But even if you foresee the danger, it does not mean you can deal with it. After all, Kodak invented the first digital camera but failed to exploit the technology. The incentive structures of many companies are to minimise risk rather than maximise opportunity. Innovation is often a young company's game.

The second answer is that companies must look as intensively inwards as they do outwards (e.g. opposing actions). Well-managed companies enjoy many advantages: strong brands, masses of consumer data, valuable historic data sets, networks of smart people and easy access to capital. But what is often lacking is the ambition that marks out the new tech companies, their ability to innovate rapidly and their extraordinary connection with consumers. In that sense, the main competition of so many established companies lies within their own organisations.

Larry Page, co-founder of Google, constantly urges his employees to keep being radical. In his Founders' Letter of 2013, he warned that companies tend to grow comfortable doing what they have always done and only ever make incremental change. "This . . . leads to irrelevance over time," he wrote.

Google operates a 70/20/10 rule where employees are encouraged to spend 70 per cent of their time on their core business, 20 per cent on working with another team and 10 per cent on moonshots. How many traditional companies focus so much on radical ventures?

Vishal Sikka, chief executive of the Indian IT group Infosys, says that internal constraints can often be far more damaging than external threats. "The traditional definition of competition is irrelevant. We are increasingly competing against ourselves," he says.

Quoting Siddhartha by the German writer Hermann Hesse, Mr Sikka argues that companies remain the masters of their own salvation whatever the market pressures: "Knowledge can be communicated. Wisdom cannot." He adds: "Every company has to find its own unique wisdom." [This wisdom reference is reminiscent of Paul Graham's advice to do things that don't scale].

john.thornhill@ft.com
ambitions  brands  breakthroughs  BT  bureaucracies  competition  complacency  constraints  Fortune_500  incentives  incrementalism  Infosys  innovation  introspection  irrelevance  large_companies  LBMA  messaging  mission-driven  Mondelez  moonshots  opposing_actions  organizational_culture  outward_looking  Paul_Graham  peripheral_vision  radical  risk-avoidance  scouting  smart_people  start_ups  staying_hungry  tacit_knowledge  technological_change  threats  uniqueness  unscalability  weaknesses  WhatsApp  wisdom  digital_cameras  digital_revolution  historical_data 
april 2016 by jerryking
Leadership Means Learning to Look Behind the Mask - The New York Times
JAN. 30, 2016 | NYT | By BARBARA MISTICK.

Don't wait until it's too late to solicit feedback. Ms. Mistick was named president and director of Andrew Carnegie’s public library system in Pittsburgh, becoming only the second nonlibrarian to lead the system in over 110 years. She went in knowing that she was considered an outsider and that she would need to call on all her interpersonal and communication skills to navigate her new position. The problem is, the higher your position in an organization, the harder it is to receive honest assessments from the people who work for you, because the balance of authority shifts. ...The search for genuine feedback is increasingly your own responsibility.... In a culture of scarce resources, people had become guarded with their opinions. ....Mistick felt that everyone except her knew what was expected to succeed in “library land.” New jobs always present the challenge of how to read the norms, standards and expectations that aren’t explicitly told to new hires....When seeking input on specific skills, the 360-degree management assessment tool is a great starting place. When you want insights on the most important priorities for personal change, it takes honest conversation with those who know you best at work....We each have more control of our future than we recognize. One of the most powerful ways we can take charge of developing new skills is to ask for feedback.
leadership  women  CEOs  Communicating_&_Connecting  sense-making  performance_reviews  people_skills  Pittsburgh  libraries  anonymity  feedback  first90days  self-improvement  outsiders  tacit_knowledge  insights 
january 2016 by jerryking
The Financial Bonanza of Big Data
March 7, 2013 | WSJ | By KENNETH CUKIER AND VIKTOR MAYER-SCHÖNBERGER:
Vast troves of information are manipulated and monetized, yet companies have a hard time assigning value to it...The value of information captured today is increasingly in the myriad secondary uses to which it is put—not just the primary purpose for which it was collected.[True, but this secondary or exhaust data has to be placed in the right context in order to maximize value]. In the past, shopkeepers kept a record of all transactions so that they could tally the sums at the end of the day. The sales data were used to understand sales. Only more recently have retailers parsed those records to look for business trends...With big data, information is more potent, and it can be applied to areas unconnected with what it initially represented. Health officials could use Google's history of search queries—for things like cough syrup or sneezes—to track the spread of the seasonal flu in the United States. The Bank of England has used Google searches as a leading indicator for housing prices in the United Kingdom. Other central banks have studied search queries as a gauge for changes in unemployment.

Companies world-wide are starting to understand that no matter what industry they are in, data is among their most precious assets. Harnessed cleverly, the data can unleash new forms of economic value.
massive_data_sets  Amazon  books  Google  branding  Facebook  Wal-Mart  Bank_of_England  data  data_driven  value_creation  JCK  exhaust_data  commercialization  monetization  valuations  windfalls  alternative_data  economic_data  tacit_data  interpretation  contextual  sense-making  tacit_knowledge 
march 2013 by jerryking
Value of big data depends on context
According to Hayek, it is not only localised and dispersed knowledge, but also tacit knowledge that is crucial for the functioning of the market system. Often, useful localised knowledge is tacit. By definition, tacit knowledge cannot be articulated and mechanically transferred to other individuals.[See Paul Graham on doing things that don't scale] Companies and governments have become more successful in collecting large volumes of data but it is nearly impossible to capture useful tacit knowledge by these data collection methods.

Furthermore, the value of big data is not about the volume and the amount of collected data but it depends on our ability to understand and interpret the data. As human faculties of interpretation and understanding differ greatly, the value of big data is subjective and dependent on particular context. Ironically, the skillful use of big data may require tacit knowledge.
data_collection  letters_to_the_editor  massive_data_sets  Friedrich_Hayek  tacit_data  contextual  sense-making  interpretation  tacit_knowledge  valuations  Paul_Graham  unscalability 
february 2013 by jerryking
"The bruises of the bandwagon: ENTREPRENEURSHIP: Reality television is revealing how desperately some people want to break into business. But many fail to analyse their ideas,
Apr. 25, 2005 | Financial Times pg 16.| by Paul Tyrrell

Everyone wants to run their own business. But many fail to prepare thoroughly before scrambling on to the bandwagon. Among the television hopefuls, the most widespread and humiliating trait is a failure to appreciate that an entrepreneur's personal qualities are just as important as their ideas.

It is a salutary warning. Venture capitalists and business angels have always been more inclined to back a great team with a mediocre idea than a mediocre team with a great idea. They attach a lot of importance to what they term "scar tissue" - evidence that the person has learned from experience.

"People who are enamoured of their own idea can be great, but only if they listen really hard,"... "Nothing goes to plan, so you're looking for people you can trust off-plan." ...Entrepreneurs are more likely to succeed if they can come up with an idea that exploits their experience. This is particularly clear in product development situations - for example, where an engineer takes the knowledge he gains at a large company and uses it to set up a rival.

Research suggests that "spin-outs have a survival edge in the market over other entrants as the result of a combination of entrepreneurial flexibility and inherited knowledge"....what distinguishes successful entrepreneurs is their ability to spot commercially exploitable patterns where others cannot. Herbert Simon, winner of the 1978 Nobel Prize in economic sciences, suggests this process is intuitive: a good business idea stems from the creative linking, or cross-association of two or more in-depth "chunks" of experience - know-how and contacts.
Infotrac_Newsstand  entrepreneurship  entrepreneur  pattern_recognition  personality_types/traits  television  spin-offs  entertainment  venture_capital  angels  cross-pollination  tacit_data  knowledge_intensive  scar_tissue  teams  team_risk  off-plan  Plan_B  tacit_knowledge  nimbleness  combinations 
november 2011 by jerryking
Amy Chua Is a Wimp - NYTimes.com
Jan 17, 2011 | NYT| DAVID BROOKS. ... Practicing music for 4
hrs. requires focus, but it’s not as cognitively demanding as a
sleepover with 14-yr-old girls....Participating in a well-functioning
group is really hard. It requires the ability to trust people outside
your kinship circle, read intonations & moods (i.e. cues & prompts), understand how the
psychological pieces each person brings to the room can & can`t fit
together.This skill set is not taught formally, but it is imparted
through arduous experiences....Chua would do better to see the classroom
as a cognitive break from the truly arduous tests of childhood. Where
do they learn how to manage people? Where do they learn to construct and
manipulate metaphors? Where do they learn to perceive details of a
scene the way a hunter reads a landscape? Where do they learn how to
detect their own shortcomings? Where do they learn how to put themselves
in others’ minds & anticipate others’ reactions?
Amy_Chua  parenting  cues  prompts  nonverbal  David_Brooks  Tiger_Moms  arduous  empathy  emotional_intelligence  EQ  self-awareness  self-reflective  metaphors  people_skills  self-regulation  girls  hunting  tacit_knowledge 
january 2011 by jerryking

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