Listening Beth Comstock

Yesterday I had a chance to attend a short conference held by Sabancı SOM (School of Management) in which the speaker is Beth Comstock, the CMO (Chief Marketing Officer) of GE (General Electiric). The subject of the conference is "Innovation and Collaboration". Although I can easily be considered to have a competative background on the subject, I like to attend activities like this to gain a better and a deeper insight.

Below you can find my short notes about how Beth Comstock (and by the way, how GE) approach the concept "Innovation":


Marketer’s Role:  Value + Innovation
Its marketer's job in a company to define value (in the market) and correlate with the innovation

Technologist Company: Fall In Love With Technology

We see companies that fall in love, somehow obsessed with technology - Mrs. Comstock call these compainies as "Technologist Companies" -. But in the real world this does not hold, companies should understand the market, get the values and have to align with them.

Create "Real" Innovation: Connect Marketers + Technologists

Innovation is done not by only technologist or only marketers. Both two domains must be combined to create "real" innovation.
The Term: "GE Innovation"

GE innovation is the process that GE used to combine technologist lead innovation and marketer lead innovation.
The following image from Alex Goldfayn blog entry can be used visualize this balance:

GE Works!
The formulation of how GE works is:
(look at what the world needs)x[(blief in a better way)+(drive to invent and build things matter)] = a world that works better!
Incubation!
Incubation is an important part of a "innovation" process, companies must allow ideas to grow. Currently, GE has 15 GE-originated startups in the company (like GE and Honda startup to produce very small jet planes)
Always Target The Right Technology For The Right Use At The Right Time!
Technology always needs an application to be in use, otherwise its meaningless

"Cheap Innovation"
Doing only what's needed is not the cheap innovation, its the real innovation
Openning Up And Collaboration
It's not possible to know all the answers. So drop your barriers to let the people who has the answers to reach you. GE received more than 5000 business plans by this approach (not all of them are perfect, but there are some items that GE wont possibly image), and spend more than $200 million for funding these projects
First Step After Idea Creation
The first question to be asked after an idea is generated/created should be "how to sell it".
Business Internet
Internet era is only starting. Until this time we experienced the consumer internet, the next step will be business internet, the industrial usage era. We begin to observe doctors, engineers creating special virtual communities.
Facebook For Machines!
Think of a social network for machines; a jet engine updating its status as "I am working perfectly" or "I have some major problems", a connected operator or a "friend" expert system observes this status update and triggers necessary processes.
Learn To Fail: Learn To Change!

Dont forget to share failures like sharing successes
Finally, The Innovation Imperative

Position Papers For HBR Cases

For my "Strategic Management" class, I have to prepare position papers for several Harvard Business Review cases. Below you can find these papers (I will update the list as I prepare new position papers):

• Adolph Coors in the Brewing Industry
• PepsiCo’s Restaurants

A New Era Needs New Kind Of Managers

The following is a short essay I wrote during the application process of Sabancı School of Management (Although I got an acceptance, I chose the Executive MBA program of Boğaziçi University):

A New Era Needs New Kind Of Managers

With the new millenium, the world entered a new era, moving from the last 250 years of the Industrial Age to the Information Age, an era of rapid and radical change. A new world is forming that bears little resemblance to that of past.

With in the Industrial Age, the rate of change was relatively slow and predictable, and seldom radical. The competitive environment was less intense and changed more slowly, product life spans were much longer. Competitive advantage came more from focusing resources on continuous improvement in quality, operational effectiveness and efficiency. Corporates used the “new” manufacturing methods to produce more, better and cheaper products (as it is humorously pictured in Charlie Chaplin’s “Modern Times”). The catchword of yesterday is “Doing things better”.

With the Information Age, the rules changed radically. People are now a part  of a network society, operate in an information economy, live in a global village and trade in a borderless world. Our world has become mobile, connected, interactive, immediate and fluid. Corporations still need continuos improvement in quality, operational effectiveness and efficieny, but the customers of this era expects immediate gratification, a greater choice of “fresh” products which results in a new dimension that corporations have to focus; “continuous corporate innovation”. The catchword of today is “Doing new things well”.

This is a turning point where the corporations confronted with new great challanges, but also offered “limitless” opportunities. This is a turning point as concepts of innovation, agility, optimisation and risk are defined as the four critical success requirements. This is a turning point where the corporations need to be agile and flexible, provide superior service, give quick responses, operate in niche markets, maintain closer customer relationships, create alliances, develop cross-cultural networks and maintain a diversity of contracts.

Turkey, as a close contributor of global world, experiencing this radical transition and transformation too.

In the history of Turkish business world, it can be seen that the state has an active, interventionist role from the first day of its foundation. This makes Turkish corporations to mainly focus on the business activities maintained by the state. This results as the core competence of corporations to gain “good” relations with the state to grow in a “protected” market. During this period, a common pattern of management practices is developed which has characteristics as centralised control, paternalism, short-termism and lack of delegation and autonomy. An interesting observation is that even the “protective” barriers of the market is removed with the 90s and new generations of managers are appointed for the period of last 15 years, this new generations tend to follow and internalize these values. In several studies, Turkey is characterized with low autonomy, low empowerment and low performance-reward contingency. A special case for Turkey is that family companies cover a substantial portion of the local private sector which show a great value of conservatism as a management behaviour.

However, in the Information Age, the shift toward creating and sustaining competitive advantage is largely based on capabilities rooted in innovativeness and change. Cutting costs and remaining efficient will still be necessary for corporate survival, but they won’t be enough. This shift to meet the new challanges of the new era, requires different sets of managerial values and approaches. Only with these attributes as committing profitability and customer satisfaction instead of endorsements and big balance-sheet values, managing without strict control, being a starter not a follower, promoting capabilities, speed and openess in decision making, building business partnerships without discrimination, free thinking, highlighting ethics can a corporation make necessary metamorphosis. Combining these terms will result in definition of “Professional Management”.

Professional management was born during 1841 at the United States after an accident, in which two trains collided. This accident showed the world that the owners of the railway company is not capable of managing the modern enterprise, there is a need of a new group of people who managed to act as business managers.

The current situation of Turkish business world bears a resemblance to that unfortunate train accident; local corparates powered with traditional, historic management model is going to be up against to corporates of global world powered with professional management, in a rapidly accelerated speed. Most Turkish large enterprises envisaged this for some time and made necessary metamorphosis actions like the magnificient transformation program Mr. Akın Öngör achieved at Garanti Bankası, but for most of the small and medium sized enterprises it is not possible to see any clear signs of awareness of the global change in the business world. And unfortunately for these unaware compaines, the result of a such collusion is already predetermined as vanishing from the future business environment. As Mr. Jan Nahum mentions in his talks about innovation and new management trends; “You can reach numbers as up to 50 billion dollars of annual import rates with current, traditional behaviour in Turkey’s automotive industry but after that a fall down is unavoidable. To go beyond that barrier, to move to a next level, you have to change how you perceive, how you think, how you act and how you manage”.

In this completely new economical, social and political environment, it is not likely that corporations can use yesterday’s strategies to solve today’s problems and expect to be in business tomorrow. To make the companies to shift towards these new paradigms, an important role is given to “professional” managers. This does not mean “professional management” is the only key factor effecting the success of this process; but without its wisdom, it is not possible to create learning, creative corporate organisations that has ability to easily adapt the new business environment; the corporate organisations of the future.

Will Cloud Services Save Network Opeators In Turkey

Having been in telecom sector for more than five years (I am still working in the local branch of a global mobile network operator), I have lots of friends from fixed and mobile network operators (lets call them F/MNO) and these days all of them are talking about how they are going to dominate the SME (small and medium enterprises) market by providing cloud based services as a sub domain of data services.

Currently (based on these talks), three basic services are defined in the "short-term SME cloud roadmap" of all local F/MNO's (some of them already provided):

1. Web site hosting
2. Email service
3. Storage space

Web site hosting is a clever but somehow a belated move because although the new Turkish Commercial Code declared that all SMEs has a company web site, this was set at 14th of January 2011 and 3 month period was given to all firms to make necessary processes. So the market for this opportunity is already occupied by local hosting firms (which also handle the design and update phases of the web sites).

Email service has similar issues with the web site hosting because these two services are usually provided as a bundle. So again F/MNO's, you are too late again.

For the storage service, the main problem will be the "trust issue". We are living in a some-how paranoid society, so it will be a big suprise for all of us if this service holds.

But what I wonder most is when we will see a network operator providing a cloud service that creates diversity. I think even a basic crm service (like a very simplified salesforce.com type application) will be enough to create this differentiation.

Wouldn't be great, if you can plug your usb modem to your notebook and reach your cloud-based virtual office within your browser anytime, anywhere?