Even given the research is sponsored by Intel, who clearly would like us all to make greater use of IT, the report has an uncomfortable ring of truth about it.  Common sense dictates that when times are tough it is difficult to justify new spending, but it is also the case that when times are tough organisations’ need to find ways of becoming more efficient and flexible.  Much of the new technology such as smartphones, tablet computers, cloud computing, etc can help bring about significant savings, particularly for SMEs.

Perhaps what this report tells us is that we overestimate the innovativeness of the vast majority of SMEs.  Many SMEs will simply carry on doing things the way they’ve always done them.  I suspect this has more than a little to do with the way we lionize entrepreneurs as committed, focused people ‘who know what they want’ and who will simply roar and growl until they get their way. Matters are not helped by SME entrepreneurs and managers who have over-committed to inflexible systems and technologies that have run their course, but who adopt a make-do-and-mend approach to ‘maximise’ these resources.  Not only is it a case of diminishing returns but also it results in the continuation of head-in-the-sand working practises.  While at first it might not be obvious, such approaches compromise the development of new and innovative approaches to opportunity, business and profitability.

SMEs  and entrepreneurs need to stop believing in their own hype.  Regardless of the fact that we are living through economically difficult and ferociously competitive times, the only game in town can only ever be to monitor and assess continuously the key drivers in your market place.  These may be technology-driven, customer-driven, competitor-driven or a combination of factors.  Whatever they are, it will be the SMEs that respond quickest to changing market conditions who will ensure they don’t fall to the ostrich tendency.  So, if you don’t want to be a victim, get rid of your fax – literally or metaphorically – and set aside some time to explore the different ways in which you might take your business forward.

By way of a footnote, the IT industry has had a huge impact on the way we do business by making readily accessible market data and in making available any number of effective and dynamic communications channels.  But where it has fallen down badly is with its poor understanding of the end-consumer, poor communication, and in over-hyping and over-pricing many of its products and services.  As the ITPro report notes, the industry needs to do a much better job in communicating the key business benefits of what they offer.

Both companies go that extra mile to get their product and supporting service ecosystem right.   While Apple tends to concentrate on the branding and promotional razamatazz around their launches, Amazon has tended to make price and its position as the world’s largest retailer the focus of its competitiveness.

With this event Amazon seemed to be saying, ‘We can do the razamatazz but we know that as well as having well-designed  products and supporting service eco-systems, a good price-point is what the consumer wants.’

Amazon have already built a strong customer for with its Kindle reader and the new range now includes an entry version for £89.  They also introduced the Kindle Touch, which is basically an upgraded version of their current offering.

But the new product that will really catch the attention of the consumer is the Kindle Fire tablet.  With a price of $199 (UK launch date and price has not yet been announced) it is set to provide the first significant competition to Apple’s iPad.  The Kindle Fire has a seven inch screen, free data storage over the internet and a new browser called Amazon Silk.  Unlike other tablet competitors, the Kindle Fire already has a well established service eco-system, which combines Amazon books, video, MP3, a wide range of newspapers and magazines via the Kindle Fire ‘News-stand’ and taps into the Android apps range.

“These are premium products at non-premium prices,” Jeff Bezos said at the launch on 28 September. “We are going to sell millions of these.”  And it would be hard to disagree.  At the moment, Apple has eighty per cent of the tablet market in America.  It will be interesting to see how things stand in a year’s time.

The report is headlined with Eric Schmidt criticising education in the UK and how it is holding back the country’s chances of success in the digital media economy.

Somewhat predictably, the report and the web audience comments that accompany it focus on the sterile debate about the UK’s ‘failings’ or otherwise with regard to the teaching of science.  In so doing, some key issues in Schmidt’s speech are overlooked.

First, he used the occasion to announce a partnership with the UK’s National Film and TV School, to help train young online film-makers.  Now it seems to me this is a field of education that might come under the category of ‘Media Studies’, one that is constantly labelled a ‘non-subject’ by our press and politicians.  Media communications and technologies are likely to be key areas for economic growth and yet our ‘vox pop’ tabloids constantly berate education’s attempts to engage with developments in this field.

Second, Schmidt also pointed to the need to bring art and science back together as was achieved in the heyday of the Victorian era.  Now I’m sure Schmidt isn’t arguing for a return to Victorian values; rather he seems to be arguing for a more balanced approach to education.  It is not about privileging science over the arts, or vice versa.  He makes the point rather neatly when he observes: “Trust me – if you gave people at Google free rein to produce TV you’d end up with a lot of bad sci-fi.”  It is important that we educate our young people to think creatively and imaginatively as well as analytically and logically.

It is telling that Schmidt picks up on our IT curriculum as  being too focused  on teaching how to use software, rather than with giving insight into how it’s made. But this is the downside of what is referred to as our Victorian heritage.  What the Victorians achieved was arguably right and good for its time.  However, a regimented, mechanistic, tick-box approach to education which effectively ‘programmes’ people in the use of tools, be they factory or IT software tools is no longer good enough.  It may have been suited to the industrialised, factory regimes of the 19th and much of the 20th centuries, but it is no longer suited to the dynamic information and energy-flows that now characterise the 21st century.  (Basically, Schmidt’s argument mirrors that which was the topic of our posting on 17 August 2011)

One of the reasons Google has been so successful is that it has provided people with the tools to retrieve information and organise their activities.  But now, Google seem to be focused on going to the next level:  encouraging people to develop their creative abilities and imagination that will be the key to delivering products and services better suited to a digital media age.

This is a consequence of the steep fall in the share price of many of Europe’s leading banks last week, which is in stark contrast to the steady rise in Apple’s valuation.  Apple’s market capitalisation has soared to $340 billion on the back of the success of innovative technology products like iPods, iPhones and iPads.

Since peaking in May 2007 the Eurozone banks have lost three-quarters of their value.

For those who care to pick up on it, there is also a clear message here as to the value and payback of investing in branding and innovation strategies that respect and connect with the multi-layered aspirations of consumers.  Apple has built a reputation and loyalty by providing products that  opened up new possibilities for their customers.  Banks blew their brand reputation in the financial meltdown of 2007 and have continued to enact a mismatch between what they promise and what they deliver.  The results speak for themselves.

STOP PRESS STOP PRESS

Apple’s Board of Directors today announced that Steve Jobs has resigned as Chief Executive Officer, and the Board has named Tim Cook, previously Apple’s Chief Operating Officer, as the company’s new CEO. Jobs has been elected Chairman of the Board and Cook will join the Board, effective immediately.

I would suggest watching the Sir Ken Robinson video on ‘Changing Education Paradigms’ first.

•

•

Robinson puts his argument across with some creativity and which just happens to be the focus of his talk.  His presentation is entertaining, witty, laced with irony and all the more thought-provoking for it.  Basically, he points out that the education systems most of us are familiar with is the product of the nineteenth century.  As such, it is outmoded and not wholly relevant to the times in which we live.  Further, he argues it is a system based on a command and control approach, convergent thinking and means-end ideology that was a feature of the factory system associated with mass industrialisation.

In many respects, the critique of the education system Sir Ken Robinson puts forward is one that has been around for some time.   But it is a message that bears repeating.  Because, the simple fact is that the system he critiques continues to maintain a strong hold on the way education is viewed, particularly within governmental circles.  Not least, because it provides an illusion of control and that governmental policies are achieving measurable outcomes.  Now it might be that the education system is achieving a measure of success, but the question is whether its terms of reference have any lasting relevance to the needs of today’s societies.  And this is where Robinson’s argument challenges received wisdom.  For Robinson the question of creating an education system relevant to the times is closely bound up  with the question of aesthetics.

If you thought aesthetics had very little to do with the hard-headed business of doing business, then think again.  The way in which Robinson makes the point about the value of aesthetics, by contrasting it with its opposite ‘anaesthetic’, is a real lesson in how to use language creatively to fire up new patterns of thinking.  Many will view the term ‘aesthetic’ as something to do with the woolly business of artistic appreciation and having little to do with the business of getting things done.  But by contrasting it with the term ‘anaesthetic’ Robinson raises profound issues with regard to the ongoing questioning of the value of ‘what gets done’.  Basically, he argues that behaviours and way of thinking that challenges received ways of thinking is effectively  ‘anaesthetised’.  The effect of this is that we carry on doing things the way we always have, even though they may bear no relation to the changing needs of the times through which we live.  For Robinson, education should encourage a creative, aesthetic mindset characterised by divergent thinking.  Ultimately, it is the promotion of a challenging, aesthetic ethos that will lead to innovative and creative thinking across all walks of life.  Watch the video and judge for yourself.

Watching Dan Pink’s video on ‘Motivation’ after Robinson, it is noticeable that he picks up on similar themes.  And it achieves this by following through on Robinson’s advice.  It challenges accepted modes of thinking with regard to basic motivation theory and thinking.  Again a similar conclusion is reached, i.e. basic ‘carrot and stick’ theory does not match the times, how people are behaving and the new thought paradigms being generated.  ‘Carrot and stick’ motivation theory is again a function of nineteenth century, means-end, mechanistic forms of thinking.  Quite simply, this is no longer the main driver for determining people’s forms of behaviour in post-industrial economies.

•

•

We live in an age characterised and driven by cultures of consumption heavily focused on convincing individuals they have the means within themselves to achieve individual self-fulfilment and mastery.  Whether this is actually the case or not is another question, but the simple fact is it is a mode of thinking that directly contradicts the basic means-end calculation and manipulation that lies at the heart of much motivation theory.  It is this striving for mastery and self-direction that is at the heart of Dan Pink’s theory of motivation and which, he argues rather too insistently, is confirmed by scientific studies.

Pink certainly offers a compelling argument for a theory of motivation that is more consistent with the times in which we live, but I’m not sure it follows through fully on where the ideas of mastery and self-direction come from and whether these in their own way simply constitute another form of ideological manipulation.

At this point, I think it would pay to ‘review’ Robinson’s video and consider how his ‘aesthetic’ might help us challenge, question and nuance the conclusions Pink infers from his reading of the ‘science’.

Google will now be in control of producing its own smartphone hardware to match its Android operating system.  This perhaps puts them on more of a level playing field in competing with Apple’s iPhone. And as many of Motorola Mobility’s phones already use Android, it would seem to be an ideal match?

However, the deal could leave other smartphone companies who currently use the Android operating system a little nervous as to where they will stand in the pecking order, particularly when it comes to having access to the latest versions and updates of the Android operating system.

Arguably, it has been the array of handset manufacturers who have got behind Android that has helped it take  the number one position from Apple in the smartphone market.  But this position could be lost if handset manufacturers decide to spread their risk by also embracing Microsoft’s new smartphone operating software.

What is certain is that the smartphone market is going to get more interesting and competitive, especially if rumours that Apple are likely to release an iPhone 4S targeting a lower price point.  This would appeal to the pay-as-you-go market, which could open up huge new markets, particularly in countries such as China.

In sum, the book draws together all the elements for drawing up business plans, marketing plans, strategic plans, etc, in their own right or as part of an integrated approach. It’s all achieved by means of a neat combination of visuals and text that help in posing  the right questions, generating ideas, and making clear the linkages entailed in drawing up coherent and cohesive plans.

Worthwhile checking out their website.

The BBC’s Rory Cellan-Jones takes a somewhat downbeat view on the potential of Apple’s iCloud, pointing to the merits of the competitor technologies and services that already exist, such as Google Apps, Amazon Cloud and Spotify.

But it is worthwhile remembering that when Apple launched it’s iPod there were any number of other MP3 players available, but it was Apple who became the market leaders virtually overnight. The challenges were even more intense with the launch of the iPhone into a market dominated by a number of highly successful and innovative brands.  Within two years the iPhone was the brand leader.  It was a slightly different scenario with the launch of iPad.  Up to that point, there had been plenty of attempts to kickstart the tablet market, but while much had been promised little had been delivered.  Significant numbers of pundits thought the iPad would crash.  The reverse was true and it sold in huge numbers.

The reason Apple so often succeeds with its digital technology, even when it doesn’t have first-mover advantage, is because it is as much a marketing and branding company as a technology company.  And when I use the term marketing I use it as defining a customer focused organisation.  When Steve Jobs returned to Apple in 1998 its mission came to be redefined as offering products and services that would be at the centre of people’s digital lifestyles.  For Apple, it as much about understanding people as realising the potential of technology.

The reason the iPod, the iPhone and the iPad have proved so successful is because first and foremost they are intuitively easy to use and are not just for geeks and techies!  This has the not inconsiderable benefit of making them accessible to a much larger market.  Secondly, these devices were launched in tandem with online services (iTunes and the Apps Store) that ensured they were seamlessly – and easily – integrated into modern lifestyle, and business, priorities, namely the digital consumption of entertainment: music, photos, video, books, conversation.  Thirdly, as a combined communication product and service they have made themselves an integral part of a social networking lifestyle driven by  the anxieties of status-seeking and the comfort of mutual ego-stroking.  Fourthly, quality, along with functional and stylish design, complete Apple’s virtuous circle of placing themselves at the centre of people’s digital lifestyles, who in turn become advocates for the company and its offerings. What is distinctive about Apple’s augmented products/services is that it often anticipate the desires of its customers, even before they are fully realised.

In many respects, what Apple has achieved constitutes a benign version of ‘Trojan horse’ marketing.  By anticipating and offering upfront the type and levels of service customers will want, Apple is able to ‘release’ demand for its product range in its entirety. In essence, by creating the iTunes and Apps stores, Apple created a vehicle which encouraged consumers to buy their hardware.  Incidentally, when Apple launched the iPhone it was initially aimed at the consumer market, but such was its appeal and versatility that it ‘released’ demand from within the business market.  Something of a Trojan horse within a Trojan horse!

It might well be that iCloud will represent the pinnacle of Apple’s strategy in the integration of its devices and service offerings as a means for gaining access to the centre of our digital lifestyles.  Having created a huge user base for iPods, iPhones and iPads, the convenience of instant ‘push’ synchronisation should not be underestimated and could well encourage further switching to the Apple brand.

To return to the beginning, comparing Apple’s technology with what already exists is to miss the point.  The source of Apple’s competitive advantage is that they are able to anticipate how customers would rather relate to, and delight in, the products and services that become available to them via new and innovative technologies.  It will be interesting to see how iWorks, Apple’s version of the PC loaded Microsoft Works and the cloud based Google docs square up in the coming months.  I suspect the appeal of the quality, versatility and user-delight of Apple’s iWorks (Pages, Keypoint and Numbers) will benefit significantly from now being accessible via iCloud.

As something of a footnote, it will also be interesting to see whether Apple’s iCloud will help overcome the reluctance of many CEOs to migrate to Cloud computing.

Microsoft is working hard to keep itself at the forefront of the dynamic changes in a market increasingly driven by social media.  News that Microsoft has bought Skype in a deal worth 8.5 billion dollars is setting the pundits speculating on the likely benefits and downsides of the deal.  Many are wondering whether 8.5 billion dollars is too high a price, but given Skype’s user base of some 660 million and the benefits it might provide Microsoft in the tablet market, it may well prove to be a shrewd investment.  And let’s remember that Skype like Google and Hoover has acquired that rare status of seeing their proprietorial brand name become a generic term for a particular activity.  We all know exactly what is meant when someone talks about googling a term or skyping someone.

Facebook also seems to be going from strength to strength and has been predicted to generate display advertising revenues of 3.5 billion dollars in 2011,  a 95 per cent increase on 2010.  This will set it on course to becoming the the largest display ad provider in the world.  Giving an impression of how far Facebook has come, Google is expected to see advertising revenue of 2.6 billion dollars in 2011.

Apple is another company putting Google in the shade, having claimed the status of most valuable brand in the world. According to Milward Brown Apple is now worth 153 billion dollars, an 84 per cent increase on last year.  Much of this increase is attributed to the success of the iPad and its online Apps store.  Millward’s joint feature with the Financial Times makes for interesting reading with regard to the value of a strong brand in difficult economic times.

It has not been a good week for Google as its advertising system is being investigated by the US Justice Department. This is following on the heels of an ongoing  investigation by the EU. While the capability for targeting specific consumer groups is highly attractive to advertisers, it would seem it is also open to abuse and is causing regulators problems.  Competitors, including Microsoft’s Bing, have accused Google of configuring its search listings so that they give precedence to its own services, and in the process effectively diminish the attractiveness of advertising with other search engines.

Last, but by no means least for the business community, today sees the IPO of LinkedIn.  Used by an increasing number of people as a networking tool, LinkedIn is being taken to market with an anticipated share price of between 42 and 45 dollars.  This will value the company at some 4.3 billion dollars, a valuation that some investors see as being rather on the high side.  Time will tell whether LinkedIn’s functional attributes keep pace with it’s perceived value as an advertising medium.

On a more disconcerting note, the frenzy of activity in the sector more generally is causing people to recall the dotcom bubble at the turn of the Millennium and the more recent housing bubble.  While we might be desperate for good news on the economic front, it’s important that the market stays realistic when it comes to working out what price it is prepared to pay for the latest high-flying brands and whether they have the potential to last the distance.

For a neat summary of how social media is changing the face of advertising check out BBC’s Rory Cellan-Jones post on the topic earlier this year.

Tweet

Real business needs simply to keep its cool and recognise that the press, the pundits, the pollsters and the politicians earn their living by keeping going the roller-coaster of expectation and disappointment, prediction and premonition.

No doubt a whirlwind romance between Harry and Pippa, another royal wedding next spring and the pundits and politicians will be assuring us of a sustained economic recovery and the end of boom and bust.  Until the first few flakes of snow, of course!