Take the story of Dell Computer [DELL] and its Taiwanese electronics manufacturer. The story is told in the brilliant book by Clayton Christensen, Jerome Grossman and Jason Hwang, The Innovator’s Prescription:
ASUSTeK started out making the simple circuit boards within a Dell computer. Then ASUSTeK came to Dell with an interesting value proposition: ‘We’ve been doing a good job making these little boards. Why don’t you let us make the motherboard for you? Circuit manufacturing isn’t your core competence anyway and we could do it for 20% less.’
Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. On successive occasions, ASUSTeK came back and took over the motherboard, the assembly of the computer, the management of the supply chain and the design of the computer. In each case Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. However the next time, ASUSTeK came back, it wasn’t to talk to Dell. It was to talk to Best Buy and other retailers to tell them that they could offer them their own brand or any brand PC for 20% lower cost. As The Innovator’s Prescription concludes:
Bingo. One company gone, another has taken its place. There’s no stupidity in the story. The managers in both companies did exactly what business school professors and the best management consultants would tell them to do—improve profitability by focuson on those activities that are profitable and by getting out of activities that are less profitable.
Category: Technology
Epic Founder Judy Faulkner Named to US Government Health Information Technology Policy Committee
A federal committee that includes a major donor to President Obama and whose company stands to profit from the panel’s recommendations holds in its hands the future of health information technology policy.
Judith Faulkner, founder and CEO of Epic Systems Corp., secured a seat on a panel charged with recommending how $19 billion in stimulus money dedicated to health IT be spent, despite opposing a key administration position on the issue.
Faulkner and her company oppose the president’s vision for health IT, but Epic employees are massive Democratic donors. They’ve given nearly $300,000 to Democrats since 2006, according to the Center for Responsive Politics.
That may help explain both Faulkner’s appointment to the 13-member Health Information Technology Policy Committee as a representative for health IT vendors, and the accolades her company regularly enjoys from prominent Democrats.
The Federal Government should not be subsidizing Health Care Information Technology with our tax dollars. Organizations should choose automation services that make sense, for them, not for tax reasons….
Reinventing Conferences, Again
Is it time for a new twist on the TED model? The esteemed Technology, Entertainment and Design Conference, soon to be pushing 30, has become a juggernaut–what with sellout events, the viral success of online TED Talks, and the spin-off of smaller TED-X conferences. But the conference’s original founder, Richard Saul Wurman, is working on a new creation that radically overhauls the formula used by TED–much as TED itself reinvented the standard business conference model when Wurman launched it in 1984.
Wurman, who is no longer affiliated with TED (he sold most of the rights to Chris Anderson’s Sapling Foundation back in 2002 and broke off his remaining ties with the spin-off TEDMED Conference earlier this year), recently announced plans for his new WWW.WWW conference, slated to debut in Fall of 2012. So far, he has lined up some heavyweight collaborators—R/GA’s Bob Greenberg and @radical.media’s Jon Kamen are on board, GE is an early sponsor, and Yo-Yo Ma and Herbie Hancock will see to the music. Featured guests are still to be determined, though Wurman promises that the conference will be “like a dinner party with a hundred of the world’s greatest minds having a conversation, two at a time.”
But here are a few things the show won’t have: Speeches, slide shows, or tickets. Wurman’s plan is to stage a series of improvisational one-to-one conversations, held in front of a small invitation-only audience and then disseminated to the outside world via a high-quality, for-sale app that captures the event.
How to survive the age of distraction
Read a book with your laptop thrumming. It can feel like trying to read in the middle of a party where everyone is shouting
In the 20th century, all the nightmare-novels of the future imagined that books would be burnt. In the 21st century, our dystopias imagine a world where books are forgotten. To pluck just one, Gary Steynghart’s novel Super Sad True Love Story describes a world where everybody is obsessed with their electronic Apparat – an even more omnivorous i-Phone with a flickering stream of shopping and reality shows and porn – and have somehow come to believe that the few remaining unread paper books let off a rank smell. The book on the book, it suggests, is closing.
I have been thinking about this because I recently moved flat, which for me meant boxing and heaving several Everests of books, accumulated obsessively since I was a kid. Ask me to throw away a book, and I begin shaking like Meryl Streep in Sophie’s Choice and insist that I just couldn’t bear to part company with it, no matter how unlikely it is I will ever read (say) a 1,000-page biography of little-known Portuguese dictator Antonio Salazar. As I stacked my books high, and watched my friends get buried in landslides of novels or avalanches of polemics, it struck me that this scene might be incomprehensible a generation from now. Yes, a few specialists still haul their vinyl collections from house to house, but the rest of us have migrated happily to MP3s, and regard such people as slightly odd. Does it matter? What was really lost?
Visualizing Historical Data, And The Rise Of “Digital Humanities”
All historians encounter them, at some point in their careers: Vast troves of data that are undeniably useful to history–but too complex to make narratively interesting. For Stanford’s Richard White, an American historian, these were railroad freight tables. The reams of paper held a story about America, he knew. It just seemed impossible to tell it.
Impossible to tell in a traditional way, that is. White is the director of the Stanford University Spatial History Project, an interdisciplinary lab at the university that produces “creative visual analysis to further research in the field of history.” (The images in this post are taken from the project’s many visualizations.) Recent announcements on the project site announce “source data now available” (openness is one of the project’s tenets) on such topics as “Mapping Rio,” “Land Speculation in Fresno County: 1860-1891,” and “When the Loss of a Finger is Considered a ‘Minor’ Injury.”
Invasion of the body hackers
Michael Galpert rolls over in bed in his New York apartment, the alarm clock still chiming. The 28-year-old internet entrepreneur slips off the headband that’s been recording his brainwaves all night and studies the bar graph of his deep sleep, light sleep and REM. He strides to the bathroom and steps on his digital scale, the one that shoots his weight and body mass to an online data file. Before he eats his scrambled egg whites with spinach, he takes a picture of his plate with his mobile phone, which then logs the calories. He sets his mileage tracker before he hops on his bike and rides to the office, where a different set of data spreadsheets awaits.
“Running a start-up, I’m always looking at numbers, always tracking how business is going,” he says. Page views, clicks and downloads, he tallies it all. “That’s under-the-hood information that you can only garner from analysing different data points. So I started doing that with myself.”
His weight, exercise habits, caloric intake, sleep patterns – they’re all quantified and graphed like a quarterly revenue statement. And just as a business trims costs when profits dip, Galpert makes decisions about his day based on his personal analytics: too many calories coming from carbs? Say no to rice and bread at lunchtime. Not enough REM sleep? Reschedule that important business meeting for tomorrow.
The founder of his own online company, Galpert is one of a growing number of “self-quantifiers”. Moving in the technology circles of New York and Silicon Valley, engineers and entrepreneurs have begun applying a tenet of the computer business to their personal health: “One cannot change or control that which one cannot measure.”
Stupid IT Tricks: Medical Records, or Why a Federal Subsidy Makes No Sense (I Agree)
A reader asked me to write tonight about the Health Information Technology for Economic and Clinical Health Act, which is about as far from something I would like to write about as I can imagine, but this is a full service blog so what the heck. The idea behind the law is laudable — standardized and accessible electronic health records to allow any doctor to know what they need to know in order to treat you. There’s even money to pay for it — $30 billion from the 2009 economic stimulus that you’d think would have been spent back in 2009, right? Silly us. Now here’s the problem: we’re going to go through that $30 billion and end up with nothing useful. There has to be a better way. And I’m going to tell you what it is.
But first a word from my reader:
STREET LEVEL ROYAL WEDDING
STREET LEVEL ROYAL WEDDING from David Francis on Vimeo.
Very nicely done.
To Cut Smog, Navistar Blazes Risky Path of Its Own
Tom Zeller & Norman Mayersohn:
In a testing cell tucked deep in the bowels of Navistar’s engine plant and technical center here, a hulking prototype of a truck engine sits behind a large glass window like a patient on an operating table. A snarl of sensors and wires is attached to nearly every part of the humming engine, feeding reams of data to a battery of computers and watchful engineers in the adjacent control room.
One measurement — for nitrogen oxide emissions, or NOx — is of particular concern to Navistar. From 2010 onward, all new truck engines must achieve tough, near-zero limits for NOx, a chief ingredient of smog. Virtually every truck maker besides Navistar chose to use an add-on system to their existing engines that uses a fluid cocktail to help neutralize the pollutant as it makes its way out of the exhaust.
Navistar went a different route, deciding to invest hundreds of millions of dollars to refine an engine that produces minimal NOx in the first place. At the same time, the company attacked the competing systems, suing federal air quality regulators and claiming that the add-on technology was so flawed that it failed to meet the clean-air requirements.
Social Media Marketing: The Fickle Value of Friendship
In a glass box in the middle of a PepsiCo marketing department, five people are staring at a huge bank of screens showing a constantly updated river of tweets, “likes”, praise and damnation from consumers of Gatorade, the company’s sports drink.
“Doing it in a glass room means every single person in the marketing organisation is seeing the insights brought to life in real time. It reminds them how important it is to know the heartbeat of the consumer,” says Bonin Bough, global director of digital and social media at PepsiCo. “I really feel like it is the future of marketing.”
A similar scenario is playing out in marketing departments around the world. A survey of members of the World Federation of Advertisers, a grouping of multinational brands, by Millward Brown found that 96 per cent were spending more of their budgets managing Facebook pages, Twitter accounts and other social media, racing to accrue fans, retweets and that elusive but ubiquitous quality: engagement.
However, the research also found that few knew why they were doing it – half were “unsure” of the returns they were getting from their efforts, while more than a quarter found the payback was “just average or poor”.