Technologists prove that there’s no need for management consultants and bankers anymore. Instant merger of Yahoo and Google simply through some software coding and creativity (the link works too). Check out YaGoohoo!gle!
Client Versus Customer
I ran across this highly referenced web page (via del.icio.us) on consulting. Although the writeup looks to be more oriented towards IT consulting as opposed to management consulting, one thing kind of jumped out at me. The web page indicates:
- Have "customers", not "clients"
- This is a minor semantic point, but one I’ve stuck with for
many years. A "client" implies that the consultant is superior,
while "customer" suggests that the consultant is beholden.
Mostly out of habit, I think I use the term "client", especially in the presence of my, umm, err, client/customer. It has everything to do with respect for my client. It in no way has to do with being superior to other people.
Perhaps the author and I are both wrong. The dictionary says that the two words are the same, and I imagine or hope that there is formality in the use of the term "client" when perhaps none is conveyed.
Steve Shu
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New York City Stunned By Seth Godin’s “Blogging Iceberg”
Blogosphere news. Seth Godin, internet marketing mastermind, coordinates one of the biggest stunts the blogosphere has ever seen. In Seth’s words, it was remarkable. Motivated by Jeffrey Henning’s influential article, "The Blogging Iceberg", Seth Godin gathered loyal blog followers on a barge financed by buddies at the venture capital firm Flatiron Partners. SAP Ventures also participated in the deal/stunt as Jeff Nolan convinced German headquarters to "loosen up a bit". In any case, the barge appeared in New York City Harbour towing a giant
iceberg. Corporate bloggers always in the know (like Om Malik, Steve Rubel, Dave Sifry, and Scott Raefer [the last two ’cause they’re watching all the blogs with their fancy proprietary databases – not because they’re smart or anything]) were expecting it, but most said Seth’s stunt was lame. Seth Godin, an adventurer
and millionaire businessman (that he obtained via click fraud schemes before it "became cool"), had been promoting his scheme to tow a blogging iceberg from Antarctica for quite
some time using subliminal blog messaging techniques conceived by Microsoft’s uber blogger Robert Scoble and encoded in the byzantine structures of del.icio.us page views. Who would have ever thought Robert would have a good idea? He just posts a lot of boring stuff. Anyway, Seth had apparently succeeded using Robert’s techniques. Seth said that he was going
to carve the berg into small ice cubes and attach leftover prophylactic noses from his latest book promotion deal, which he would sell to the
public for ten cents each. These well-traveled cubes, fresh from the
pure waters of Antarctica, were promised to improve the flavor of any "Purple Cow" milk they cooled. Slowly the iceberg made its way into the harbor. Bloggers provided exciting blow-by-blow coverage of the
scene with Flickr photos and MP3 podcasts of the cheering bloggers and waves smashing against the shore. Tom Peters was on the scene, but the only words he could get out of his mouth were the repeated words "wow … wow … wow … Seth, I’ve finally found it …". Only when the berg was well into the harbor was Seth’s secret
revealed. It started to rain, and the firefighting foam and shaving
cream that the berg was really made of washed away, uncovering the
white plastic sheets beneath and the #17 scam it really was.
Steve Shu
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This post has been cross-posted to The CIO Weblog
Preparing Children for the Offshoring Revolution
In the past month I’ve blogged twice about offshoring and outsourcing.
In the first post, I summarized some key points in a BusinessWeek article about the outsourcing of innovation. From a skills perspective, it may have had some interest from those involved with orchestrating supply chains. Perhaps a bit of a narrow focus.
In the second post, I tried to draw in some additional focus on how significant the offshoring force will be on the overall economy. That might have drawn some interest from professionals looking out for themselves as to how to keep their skills fresh. A bit broader of an audience.
Here’s something also close to home but not necessarily directly associated with the aspects of keeping skills fresh and worrying about where jobs will go. The topic is how to make sure your children are adequately prepared for the global future with language skills. May be more important now than ever given the offshoring revolution I described. May also be a good domestic business opportunity for those that can be more aggressive with providing language tutorial services, value-added services, or lower-cost services to the youth market.
A quote from the article that triggered this post ("Great Toddle Forward"):
JaNiece Rush of Lifestyle Resources, a placement agency, says 35
percent more families have requested Mandarin-speaking nannies this
year than last. At the Pavillion Agency, requests for Mandarin-speaking
sitters are up tenfold since 2000, says Clifford Greenhouse, mainly
from “extremely affluent” parents. Some of these parents are Chinese or
have adopted Chinese babies. But others want to give their toddlers a
leg up in globalized society.
Timing for children on the language front is more critical that other learning areas. For me, I can only speak English. I waited until graduate school to take Mandarin – it’s hard to learn that late in life – and it would not be possible for me to conduct business in China without being immersed much more. So keep language in the back of your mind as you think about your kids. Transferring preconceived ideas from one’s own past about language may less relevant given globalization.
Steve Shu
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Fred Wilson on Bubble 2.0
Very coincidental that related to my prior posts on financial markets and "The Wisdom of Crowds" that venture capitalist Fred Wilson posts about the potential of Bubble 2.0 contrasted by the real promises of Web 2.0. Is Fred thin-slicing what he is seeing and applying tacit knowledge to hint about the dangers ahead? Are free markets always wise?
I really like Fred’s closing comments:
I don’t have any good answers to these problems, but I’ll say this:
If you were at the first party, then you should never forget how it felt when it was over.
Drink responsibly this time.
I was planning on posting something I missed before (in a
managerial-decision making post) on forward thinking about regret to
assist with decisions. Fred’s comments are a good example forward thinking about regret to resolve a decision that can’t be rigorously reasoned out.
Steve Shu
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Update (3/29/05): I realize that I probably should not draw such a close parallel to the markets addressed in the hot hand fund post and Fred Wilson’s post. I suspect that Fred’s post has more focus on the venture capital markets as opposed to the overall market bubble burst we saw in Bubble 1.0. That said, the gist of my post was to provoke thought about when collective thought breaks down because of groupthink or other reasons.
Update on Post Regarding “Hot Hand Fund”
Reader Barbara has nicely pointed out to me that the "hot hand" fund that I referenced in my prior post doesn’t look like it’s performing that well right now (see Yahoo). I’ve reproduced the chart here (click to enlarge).
As a note for casual readers of my blog, my prior post was trying to draw connections between current, real-world applications and discussions in James Surowiecki’s book, "The Wisdom of Crowds". My posts should not be interpreted to be investment advice.
How performance of the "hot hand fund" (not the actual name of the fund) will shake out is to still to be determined I suppose. Cumulative returns definitely look above average compared to the market returns.
As an additional note, I understand that another academic in finance was wondering whether the effect could be the momentum effect or a variation of the momentum effect observed in behavioral finance. Note: I am not sure if this academic saw the returns chart and timescale covered. Timescale is a pertinent dimension for observing some of the behavioral finance effects.
Steve Shu
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Good Post on Software Industry Consolidation
Jeff Nolan (SAP Ventures) has an interesting post covering consolidation in the software industry. There are at least three key undercurrents to his post covering background of this sector of the economy, M&A philosophy from the perspective of platform vendors, and the importance and practicalities of post-merger integration within the software space.
Jeff’s pragmatism shines through in this part of his post:
… Probably the single biggest thing you can do with an
acquired company is know what members of the management team and rank-and-file
that will be leaving the combined companies no later than 12 months after the
acquisition. The fact is that when you have large companies buying small
companies most of the people won’t mesh together for the simple fact that
entrepreneurs and people attracted to startups don’t like big companies. So
knowledge transfer and integration becomes a critical success factor.
Although I’ve pointed out some general M&A studies done in the consulting industry here (not to mention another study by McKinsey here [free subscription required] that reveals "that 70 percent of mergers failed to achieve the predicted
revenue synergies, while cost synergies were overestimated by at least
25 percent in a quarter of the mergers"), Jeff’s post is great because it signals some experiences specific to software sector M&A. Clearly, not all M&A deals create an exitus of personnel. In the M&A scenarios that have been closer to home for me (generally telecom space), one key aspect of many deals is that management typically goes out Day 0 to proactively "re-recruit" personnel – e.g., management assumes that M&A deals create tension that must be relieved. That said, from the people I know who have been involved in M&A in the software space, the day after the deal it is not uncommon for those in the acquired company to have looks on their faces like they are reporting to prison even though their pockets may have been lined with gold.
Steve Shu
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Article on the Value Debate Over MBA Degrees
Last week I cited an article by Professor James Carlini that captured a big but sometimes forgotten point about the WorldCom fiasco. This week he begins a two-part series on the debate on the value of an MBA. Professor Carlini had picked up on a thread of MBA topics on this blog (potentially starting here) and was motivated to write some of his own perspectives.
One paragraph from Professor Carlini’s article really jumped out at me. He writes:
In today’s competitive and mobile society, values have changed. Some working professionals want convenience and expediency in getting an M.B.A. They have been sold on this as the criteria to select a school. There are online schools, extension programs and other avenues to go through instead of the traditional approaches that some schools still use. Tens of thousands of people graduate with an M.B.A. every year.
I haven’t followed the MBA supply and demand issues that closely, but from my vantage point in the blogosphere, I have heard from respected industry people that there may be too many MBAs out there and that this diminishes the value of the degree. Perhaps so.
My biggest concern would be that business schools need to make sure that their curricula and reading material are up-to-date. There has been some significant shocks and changes in the world over the past half decade. Some that come to mind are:
- major economic shift related to offshoring and potential marginalization of even innovation
- big changes in technology and viral diffusion models (e.g., Tipping Point-type stuff)
- stock market bubble bursting and change in demographic needs of business school students beyond consulting and investment banking
- corporate scandals and corporate governance concerns
- ballooning US trade deficit that will not be reversed for many years to come.
When I asked Malcolm Gladwell to what extent the "The Tipping Point" was diffused in business schools, he replied something to the effect of "it is too early to tell". Granted, I can appreciate the needs of business school professors to balance academic caliber literature vs. popular writing. Yet, for something that is on top of the business world (i.e., viral models) … well Gladwell’s response made me a little uncomfortable.
Steve Shu
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