Noted: According an interesting piece by McKinsey on the new Japanese consumer, big-box discounters outside Tokyo and retailers such as Costco and Ikea are benefitting significantly from a March 2009 decision by the Japanese government to reduce the maximum freeway toll on weekends to ¥1,000 (about $11) regardless of the distance traveled. More people than ever are now taking advantage of the lower prices of these stores outside their local living in part because a restriction has been lifted. It’s not the only reason they are shopping there – the recession is more important – but the stores probably may never have anticipated the effect on them.

Noted: danah boyd, in her address to open SXSW this month, related the following story: “I met a teen whose abusive father was recently released from jail. Recognizing that a restraining order would not be enough protection, the teen and her mother moved thousands of miles away. As the teen began making friends in her new school, she begged for a Facebook account. Her mother caved and both the daughter and mother worked to make the account as private as possible; neither of them wanted to face the consequences of being found. In December, when Facebook changed its [default] privacy settings [to Everyone], this teen and her mother didn’t realize what the change in privacy settings meant until someone else pointed them out after the fact. Is putting her at-risk an acceptable bi-product of Facebook’s changes?” Facebook has 400 million-plus apparently satisfied users; it would be devastating to two of them if, unintentionally, the impact of the change in privacy policy had not been communicated to them.

Noted: Although this is, I imagine, precisely what Facebook is intended to do, I recently heard from someone in one of my classes when I was a middle school teacher some 39 years ago. (Gasps are acceptable.) We connected by phone and during a two-hour conversation, we caught each other up on our lives since then and on families and I heard a bit about some other people in the class. This example probably does not really belong under the title On Unintended Consequences, but I include it because it certainly was unintended from my perspective – but thoroughly enjoyable.

I only bring these unrelated examples up for one reason, and that’s to remind myself and perhaps you that for all the intentionally positive consequences of technology such as social networking, online banking, and blogging, etc., there are also unforeseen, unpredictable impacts. Online banking, for example, means I never have to enter the bank for anything, which also means I am a virtual customer as far as the bank is concerned. I live in a very small town so I do know the current bank official, but I see her no more than once a year and most often to replace a lost ATM card. If I wanted to borrow money, I might have a much harder time because, frankly, they do not know me. My wife knows all the people in her bank because she is a regular, physically present customer.

We recently refinanced our house, and, until closing, I never met or saw anyone I dealt with. Nearly everything was handled by email or cell phone or landline. But I really enjoyed the closing because a very nice, personable, and knowledgeable woman came to our home and walked us through it. She put a face on the transaction.

I think the one thing people really want in an online relationship, whether they are friends, friends of friends, one-time customers, or long-term customers is trust, and that is very hard to build virtually and very easily and quickly lost. One mistake – such as a misspelled name or inaccurate transaction – can diminish or terminate the relationship. For all the convenience, choice, and selection that online buying and selling create, the magic is that trust occurs at all. That it does – far more often than not – says something about people’s openness and about companies’ diligence and cleverness at establishing virtual relationships that matter.

The real lesson of the iPhone turned out to have very little to do with the phone at all. The iPhone–and now Android–experience underscores the versatility of business platforms and ecosystems when connected to a powerful mobile device. But the mobility experience has also taught us another thing: there are new vistas of human behavior and tremendous opportunities for industries and institutions are being revealed—opportunities that many companies and governments misunderstand when they judge the value of mobility in their futures.

Many see mobility as simply another communication channel or another medium. Others mistakenly view mobility as simply another information technology, much like those that preceded it. They do not see how a mobile device combined with a business platform (elsewhere I have discussed the characteristics and success factors of business platforms) can lead to new business models, entirely new businesses, and new growth options.

Here are five critical elements executives must understand about mobility. Mobility creates:

1. Micro-tasking. How small can a meaningful piece of work be? Is not the right one-word answer immeasurably productive at the right time? What about a single word of encouragement at the right moment. Rehearsing a new set of phrases for a new language as an adult or reviewing multiplication tables during a couple of available minutes as a child can be remarkably effective and efficient. This is the power of micro-tasking and mobile platforms enable this behavior in ways and times not possible before. Multiply this by the millions or perhaps billion moments per day and you have new levels of potential human productivity and significantly revised time budgets. And there are examples: The Extraordinaries harnesses voluntary micro-tasking to help those in need and see Denis Hancock’s post, “The iPhone, growing up digital, and my daughter’s education,” on the way micro-tasking changes the way pre-schoolers learn.
2. New Creativity. Humans are fundamentally asynchronous and associative. We require props to operate on schedule. Most of the time our ideas, inspirations, and breakthroughs seem random or triggered by some event, association with another idea, or situational experience. Because our devices are always with us and allow us immediate access to tools that were formerly attached to a desk or office, mobile platforms enable us to work in a more natural way – asynchronously and associatively. When did you have your last creative idea? Being connected to a global infrastructure, able to access capabilities at a whim, or simply using an appropriate app at the appropriate time enables new levels of creativity.
3. The Growing World of Sensors. Mobile devices loaded with sensors will revolutionize health, safety and security. Sensor technology is growing in its ability to sense the world that is visible to humans as well as the world that is not. When you integrate sensor technology (biosensors, temperature, radiation, personal sonar/radar etc) into mobile devices married to platform infrastructures, every human being becomes a sensing station that can measure environmental pollutions, noise pollution, unhealthy emissions, or dangerous hazards. The implications for health, safety and personal care surpass any in a non-mobile, non-sensor based world.
4. Enhanced experience or augmented reality. Much like the headphones issued at some public museums enhance the one’s understanding of museum artifacts, all facets of daily life can be enhanced by location, context and proximal awareness. Location data can enhance the experience of the local opera, theatrical performance, or visit to a museum. Commercial enterprises, whether serving B2C or B2B marketplaces, have the ability to augment the entire procurement process through mobile platforms. Employees can be augmented with relevant information and tools when serving customers and providing contracted services.
5. Digital Identity and the Rich Digital Self. As remarkable as the human capacity to remember is, it remains limited in many ways. The same is not true of devices that sense and store, activities that mobile platforms do in unique and often helpful ways. If my rich digital self is only based on what I can recall, it is limited. On the other hand, a rich digital self enhanced by streams of unbounded data collected through my mobile platform can create personal value and protect my privacy.

Are these areas where the greatest opportunity awaits? Are there others that I have missed? Are there companies and institutions that seem to really recognize—and leverage accordingly—the power of mobile platforms? Is there a role of for mobile business platforms to meet the special needs of your marketplace? Or will you stand by and let others, competitors and new entrants till the fields of mobility?

Appistry is expanding its Cloud IQ platform, a basis for building a private cloud inside the enterprise, to include a file storage system. Cloud IQ Storage is aimed at extremely large storage loads-- up to a petabyte -- that would enable next generation, high scalable applications dealing with masses of data.

As we all know, mobile phones offer much more than talking and texting these days. As anyone with an iPhone or any smart phone knows, there are thousands of applications available to conduct transactions on your phone. Yesterday, Target announced that anyone with a web-enabled mobile phone can access and use their coupons in the store.  Target claims to be the first major retailer to offer these digital bar-coded coupons at stores nationwide. Per Target, the coupons:

allow guests to receive exclusive offers directly on their mobile phones. Coupons are redeemed by scanning a barcode on the phone at checkout.

Customers are able to opt-in to the program three ways: via PC at Target.com/mobile, on their phone at m.target.com or by texting COUPONS to 827438. The coupons are for one use only and expire on the date listed, similar to paper coupons.

The technology to make offers and bar codes available on a phone is not the issue, it’s the infrastructure required in each store to be able to scan and record the data. This is where the major investment is, and why things like mobile coupons have not been introduced sooner. In other parts of the World people can use their “mobile wallets” to get food from a vending machine or to scan and gain entry to a public transit system. North America still has a lot of infrastructure to put in place in order for this level of mobile use to be more widely available.

A couple questions about the mobile coupons:
1. How will Target deal with stores that have “dead spots.” If your web-browser isn’t working how can you access the coupons for checkout? Can you download and save the coupons/barcodes on your phone directly or is a connection required?
2. Why isn’t anyone talking about the green benefits here? This option should cut down on paper use and if other stores transition coupons and things like loyalty cards to a mobile platform there could be a huge cost savings for them as well as a great environmental benefit for the rest of us.
3. Will people use them? I would think that having them more easily accessible on your phone would mean that more coupons get redeemed. I am curious to see if there is an uptick in use or any research that suggests better sales from this program.
4. What do you think? Do you currently use mobile coupons? Would you use mobile coupons? I just signed up and look forward to testing it out.

The year has started out with significant M&A activity from vendors looking to deliver the necessary components for cloud computing. They all come to market with their own technologies and solutions, but there's one offering that's a must-have.

There's an experiment underway to see whether video recordings of police actions can be captured as they occur -- by an officer wearing a camera as an ear piece. Local police forces can't afford the system that captures the contents of the camera and stores them. But that's where the cloud can help.

I am reminded today of the blues. Back in December, nGenera held our members conference in Memphis, TN, hosted by the good folks at FedEx. On the second evening, we were treated to dinner and at B.B. King’s Blues Club followed by the musical stylings of Preston Shannon’s Memphis Blues. What does this have to do with collaboration? A lot.

A blues or jazz band—or any ‘jam band’ for that matter—operates using many of the design principles we’d like to see from a collaborative enterprise. Unlike an orchestra, a band is much more fluid in their interpretation of the music. They are able to improvise on the spot, blend sounds, and often play to the mood of the audience. In other words, they innovate, create mash-ups, and are responsive to users.

I’m not the first person to use the band analogy. Barry Rabkin of the Market Insight Group asks whether technology analyst firms are more like a jazz band or symphony orchestra. He alludes to the fact that the jazz band style is more agile and responsive to customer demands—another important outcome of collaboration:

“Another area where jazz musicians differ from their symphonic counterparts is that jazz musicians, sensing their audience, can and do take liberties with new selections not identified during their rehearsals. They can do this because they have a broad library of music and musical explorations in their knowledge set and, as importantly, they know how to blend their sounds together to get the best outcome possible for their audience.”

What’s more, in a symphony orchestra the conductor alone is responsible for guiding the entire team, whereas with a distributed, ad-libbing crew, anyone can start pushing with a new riff or mood and the others will follow suit. In this way, the benefit of each player’s perspective and expertise is baked into the model.

One of the factors that allows a band to operate in this manner is the existence of very well defined roles (i.e. guitarist, vocalist, drummer, base, keyboards, etc.) and somewhat open tasks (i.e. what songs to play, when to riff, what chords to use, etc.). This is another important learning for the enterprise. As Lynda Gratton and Tammy Erickson note in the HBR article Eight Ways to Build Collaborative Teams:

“Cooperation increases when the roles of individual team members are sharply defined yet the team is given latitude on how to achieve the task. [...]Assign distinct roles so team members can do their work independently. They’ll spend less time negotiating responsibilities or protecting turf. But leave the path to achieving the team’s goal somewhat ambiguous. Lacking well-defined tasks, members are more likely to invest time and energy collaborating.”

In addition to looking at how bands are structured, we might also consider how band members collect largely unstructured customer experience ‘metrics’ in real time and use the feedback to adjust their approach. These metrics provide a useful analogy for the type of approaches leading companies should take when developing customer strategies, including:

• The applause of the crowd: What kind of noise are customers and prospects making online and in social media channels? Using sentiment analysis companies can find out if it is positive (cheers) or negative (boos) and change their tune accordingly.
• Number of people dancing: How engaged is your audience? Metrics might be based on active participation on forums, comments online, rating of content, and re-broadcasting of brand messages, or more passive (i.e. head bobbing) activities such as subscribing to feeds, friending, and following.
• Song requests: What kinds of requests are coming into your contact center and support organization? In many organizations, the contact center is an untapped wealth of customer feedback, largely ignored by groups like marketing and product development. Listening to this channel and other prosumer input can lead to dramatically improved customer experience.
• Duration of stay in the bar: How long do customers hang out in your online properties? Using Web analytics, companies can now obtain this information, as well as data about how people got there, what path they take along the way, and how influential various ‘promoters’ are at bringing in prospects.
• CD and merchandise sales: How are Web interactions translating into sales? The performance is about creating an experience, but ultimately, in order to be profitable, you need people to buy your stuff.

As companies continue to seek best practices and metrics for collaboration, I firmly believe that some of the more innovative solutions will come from non-traditional fields that have deep roots in collaboration, but that have eluded formal study and analysis. (If I’ve managed to spark an interest in enterprise lessons in collaboration from other disciplines, also see my previous post on Measuring collaboration: Lessons from Shane Battier and the NBA and the related Collaboration box score.)

About 3 years ago I first become aware of what can best be called a ‘movement’ dedicated to “Design Thinking,” when the term started showing up in some of my favorite blogs (e.g., Idris Mootee’s Innovation Playground).  The concepts became clearer and more compelling to me in June, 2008 when the Harvard Business Review published a wonderful piece on Design Thinking by Tim Brown, CEO and President of IDEO, the world-renowned innovation and design firm).  Since then, several books as well as some remarkable shifts in company fortunes have reinforced my interest, including Tim Brown’s ‘Change by Design: How Design Thinking Transforms Organizations and Inspired Innovation‘ and ‘The Design of Business: Why Design Thinking is the Next Competitive Advantage‘ by Roger L. Martin.

Most recently I’ve been giving a lot of thought to how Web 2.0 might help foster and enable Design Thinking.  I’ve been doing this as part of a new multi-company research project I am leading.  And I’m very excited!

The Case for Design Thinking in the U.S.

The insightful Thomas L. Friedman, in a New York Times Op-Ed column on March 2, 2010 titled, “A Word From the Wise” noted comments in a speech by Paul Otellini, CEO of Intel, who was in Washington to talk about competitiveness:

that a 2009 study done by the Information Technology and Innovation Foundation and cited recently in Democracy Journal “ranked the U.S. sixth among the top 40 industrialized nations in innovative competitiveness — not great, but not bad. Yet that same study also measured what they call ‘the rate of change in innovation capacity’ over the last decade — in effect, how much countries were doing to make themselves more innovative for the future. The study relied on 16 different metrics of human capital — I.T. infrastructure, economic performance and so on. On this scale, the U.S. ranked dead last out of the same 40 nations.”

Too many companies (and the governments that shape corporate behavior through taxes and regulations) have become too comfortable with exploitation, and not sufficiently adept at exploration.  They have come to rely too much on analytical thinking, and not enough on intuition.  They have become so bogged down in their business core, they have all but ignored the edge where customer problems meet the creative process to create new products and services.

In the next few posts, I want to share what I have discovered and learned so far, and hopefully stimulate some constructive discussion and engage you, my readers, in shaping the upcoming research.

Does Your Executive Management Know What They Are Doing?

In a 1998 HBR article entitled, “Interpretive Management: What General Managers Can Learn from Design,” Richard K. Lester, Michael J. Piore, Kamal M. Malek, observed:

Today’s markets are increasingly unstable and unpredictable. Managers can never know precisely what they’re trying to achieve or how best to achieve it. They can’t even define the problem, much less engineer a solution. For guidance, they can look to the managers of product design, a function that has always been fraught with uncertainty.”

“We shape our tools, and thereafter our tools shape us.”  Marshall McLuhan

So, the big question for me is how can the tools we have shaped into Web 2.0 enable ‘Design Thinking’ to help us realize dramatically higher business performance?  It seems that we have a whole new and powerful set of capabilities – social networking, crowdsourcing, innovation jams, social and semantic search, collaborative project, program and portfolio management, polling, listening feeds and activity streams, tags, 2D and 3D modeling, prototyping, virtual worlds, workflow modeling and automation, and on and on. And yet, aside from knowing that a distant friend is having a bad hair day, most of these tools and technologies are still looking for a meaningful business purpose.

So, What Is “Design Thinking”?

There are many definitions and descriptions, but the ones I’ve found most illuminating are:

The methodology commonly referred to as design thinking is a proven and repeatable problem-solving protocol that any business or profession can employ to achieve extraordinary results.” – Mark Dziersk, Fast Compan

A discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.” – Tim Brown, Ideo

Design thinking is always linked to an improved future.  It is a creative process based around the ‘building up’ of ideas, rather than critical thinking which is more concerned with analysis and the ‘breaking down’ of ideas.   Design Thinking moves design from a downstream (tactical) step to upstream (strategic) – vests everyone involved with the role of ‘designer.”  At its best, Design Thinking balances art and science, intuition and analytics, validity (doing the right things) and reliability (doing things right), exploration and exploitation

Design Thinking Has Profound Organizational Implications

Design Thinking has profound implications for:

• Organization structures
• Rewards, recognition, compensation
• Portfolio management and strategic alignment
• Governance and leadership style
• Talent management and global sourcing

I believe that it also presents a significant opportunity …

• For IT, HR, Finance, Facilities, Legal, etc. to step forward and make a real contribution to business success
• To re-think ‘staff /line’ roles and responsibilities
• To learn to love matrix management!

How is Design Thinking playing out in your organization?  How have Web 2.0 capabilities helped (or hurt) these efforts?  How do you see this playing out over the next couple of years?

To be clear, Design Thinking is essentially human centered, and there is something potentially incongruous in discussing the use of Web 2.0 to enable it.  However, I still firmly believe that these collective and collaborative technologies have a role in “greasing the skids” to make Design Thinking more accessible.  I will pick this up and drill down a bit further into this realm and discuss  ideas on how Web 2.0 can play a positive role in Design Thinking.

Graphic courtesy of IDEO

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As I may have mentioned before, Valve Software’s Portal is a favorite game of mine. At our December 2009 Insight conference I profiled it as an example of a game that does an excellent job of making players feel at ease in a system that is governed by alien rules, while teaching players how to think in a new and different way–valuable lessons for enterprises that wish to help their new hires hit the ground running when dealing with specific and well-established processes.

There is more to the game than a comprehensive tutorial, there’s also a sharp story, and perhaps more significantly, a robust content delivery and data-mining platform that Valve uses to update and monitor the usage of their products. Valve’s content distribution platform, Steam, allows the company to apply bug-fixes and updates to games, as well as learn about how users go about playing through the games, including but not limited to the furthest level of completion, and whereabouts in the game players are most likely to meet their end.

While the ability to glean insights about how their customers use their products must be invaluable as feedback data for making better and more engaging games, it is the ability to update content seamlessly on users’ computers that was a move to watch this past week.

To prepare for the upcoming release of Portal 2, Valve quietly and unceremoniously released an update to 2007’s portal that changed the end of the game. The practice, known as retconning, or enforcing “retroactive continuity” is usually met with nerd-rage, but seems to have been well-received by the gaming community in this case. Thanks to their content distribution and monitoring platform, Valve has been able to take a product already in the hands of consumers, and modify it so that when their forthcoming product hits the shelves, the continuity between the first and second installments of the game’s story is cohesive and correct. Not something that could be done with the game of Life or Clue.

Steam isn’t the only content distribution platform that has the ability to update and change the user experience after the sale is made, Amazon’s kindle had an unfortunate time with what is more or less the same story, and I’m sure that there is plenty of legal language and technical infrastructure in the iPod/Phone/Pad terms of service that allows Steve Jobs to legally annex users’ first born children.

As an increasing amount of products are imbued with connectivity and access to a platform, the way that companies think about the experience they deliver to users will need to change in kind. Companies will need to find ways to cleverly leverage these platforms to make their brand experience really resonate with customers–all the while avoiding pitfalls where they may alienate users and lose their trust.

It’s been a fascinating week. I’ve been in Washington DC since Saturday, primarily attending the annual conference and international symposium held by the Consortium for School Networking, which goes by the acronym CoSN. CoSN is the primary professional membership organization for chief technology and chief information officers (CTOs and CIOs, sometimes the same person) of K-12 school districts.

nGenera is a major, national sponsor of CoSN. If you have followed the work of Don and frequent collaborator Anthony Williams, you recognize this as consistent with their coverage of education as a key topic of their writing and nGenera’s research. And while I agree with Don and Anthony, that the tools and (in many cases) the conditions are in place for dramatic improvement to take place in the public education system for many a country, my personal opinion for the U.S. is gloomier, in that I think we are in for a decade of frustration.

Maybe I’m a little tired from a week of 18-20 hour days and running my Starbucks card through too many Venti bold cups of coffee. But, the state of public education in our country seems to be awash in contradictions, opposites, and (as the cliché goes) “left hands not knowing what the right hands are doing.”

For instance, on the one hand, it seems that most people understand the transformative potential for IT in learning. We are witness to it literally before our eyes on a daily basis, as my colleague Denis Hancock made the case so well in his post Wednesday, on the subject of the impact of iPhone apps on his daughter’s learning. Yet, on the other hand, few school districts include the CTO at the cabinet level (in other words, as a member of the senior executive team directly reporting to the superintendent) in the district’s leadership.

Part of the issue, which CoSN is working to change, is that the CTOs themselves are not well prepared to be effective at that senior leadership position. Many lack the business vision and strategic leadership skills to operate as effective change agents and equal partners in the running of the district with the other leaders. Thus, an important objective for CoSN’s members and staff is to promote the adoption of an Essential Skills Framework for CTOs, advocating that there is the profession itself can do a better job to equip its members, preparing them to be more effective leaders.

To take a different issue, on the one hand, there was a nearly universal cry for the need for standard approaches to web 2.0 content production, assessment, and platform deployment. Yet, on the other hand, in a panel that closed the morning portion of an international symposium day at the CoSN conference, it was ironic (to me anyhow) that the five speakers – from ePals, Taking IT Global, IEARN-USA, NASA’s GLOBE program, and European Schoolnet – presented their web 2.0 platforms for about 10 minutes each, in succession, but yet by my hearing completely missed the opportunity to address how they were working together.

In every case, each one seemed to be busily building communities of millions of users, thousands of pieces of content, with hundreds of schools and or regions involved. However, except in the case of the European Schoolnet, which is a partnership of multiple European education ministries, there was practically no mention of how any of the presenters were striving towards cross-promotion, standardization, or (god forbid) merger of operations and mission from two into one, or three into two, etc.

On the one hand, you have the President and Secretary of Education setting ambitious and merit-worthy goals of achieving an increase to a college graduation rate of 60% by the year 2020, from our present level of approximately 40%. This means, from the federal perspective, a real focus needs to be on what we can do to impact the success of kids at the 4^th grade level and above, starting now. Yet, on the other hand, data from regional groups like the E3 Alliance in Texas and others shows that frequently the point of greatest leverage is young children and getting them “school ready” by the time they get to kindergarten.

Lastly, the final day of the CoSN conference was billed as an advocacy day, where we spent the morning hearing about the legislative funding priorities for Education, from CoSN and three other education-related partners: ISTE, SETDA, and SIIA. On the one hand, the associations had the data and talking points clearly showing how critical education is to the success of the nation and how important some of the funding streams are to national goals.

Yet, on the other hand, the panel of congressional staffers who spoke to the audience of 100 or so software and CTO/CIO leaders convened to advocate to their various state delegations of senators and congressmen and women were extremely bearish on the chances of the education priorities getting much attention in 2010, due to other pressing U.S. national priorities such as healthcare reform, job creation, and of course, inflexible military and social entitlement program commitments.

It’s like the comment that a senior federal technology official from an agency (not the Department of Education) made to me, on my last day in the city this week, about the especially challenging position for a change agent in the government. He used the example of the military and recounted that it was about 100 years ago that the U.S. Navy determined they would no longer build ships out of wood…that all future vessels must be built using metal.

Without that specific and irreversible requirement – which had an impact, no doubt, of enormous consequences to supply chains, inventories, jobs, and countless other transition costs – one can just imagine that 50, 60, 70 years later, we might still have been building and launching new ships made of wood. The problem, he said, is that in some domains – and I would venture that education is one of them – it’s very hard to recognize the wooden ships.

What do we do in the meantime, given that the status quo isn’t an acceptable option?  That’s where I think the government is at least trying to apply the principles of social entrepreneurship and innovation, with the reauthorization of “No Child Left Behind,” now more benignly named the Elementary and Secondary Education Act (or ESEA), and the “Race to the Top” program.  It’s also where I think we must see more public/private partnerships emerge.  Experimentation must be encouraged and real consequences have got to be at stake for communities, ultimately producing quantifiable, economic value like we describe in the Nexus Economics theme in nGenera’s 2010 research agenda.

So, if you’ve got a “wooden ship” that you want to sink and, more specifically, an education innovation that you want to promote, then tell us about it.  Or better yet, tell us AND tell the Department of Education, through its new Innovation website.  Let’s prevent a decade of frustration in public education.

SiliconRepublic quotes a Google Europe exec saying "desktops will be irrelevant in three years." CIOs can only dream that some device, any device, would actually go away.