We tweet and write on what we find inspirational in our daily work

Can service design become media’s secret weapon?

This article was originally published in The Media Briefing–the intelligence platform of the global media industry and appeared in the American Press Institute’s “Need to Know” newsletter. Professor Jennifer Pybus, a senior lecturer at the London College of Communication, studies the political economy and architecture of third party applications. In her view, one of media’s main challenges can be found in the algorithmic literacy of its users: “People don’t necessarily want to be challenged. If they see something that confirms their ideological position, they feel more comfortable.” Producers of media services face a double challenge: first, their users should be aware of the flaws inherent in algorithms which are made by humans, may include their biases and, in the words of Vint Cerf, co-inventor of the internet protocol, “may not work exactly the way they were intended or the way we expect them to.” Secondly, how do we develop the critical thinking to understand the innards of our algorithmic digital life? Maybe Spotify highlighting music that conforms our general tastes is harmless: Discover Weekly, Related Artists and Recommended Songs all fill this user need–but in the news ecosystem, the same algorithm might enhance our confirmation bias and work against core creeds of media literacy. What do Leave.EU, #MAGA and conversion rate have common?  In the “transition from mass to micro media”, as Pybus describes the digitisation journey of advertising, consumers benefit from micro-targeting and “appreciate being served only ads that are just for them”. However, the mechanics of micro-targeting are contrary to the information needs of informed citizens, who need to see all the views – not just the ones they like. “There’s a missing link...
read more

The Trust Project: a call to arms for news media

This article was first published on January 7th 2017 by TheMediaBriefing.com, the intelligence platform for the global media industry. TMB combines original analysis, insight and reporting on industry trends, challenges and opportunities with selective curation of the best articles on the media landscape from around the media world. Over its one and half years of life, the Trust Project has been collecting insight from audiences through a direct dialogue aimed at designing media for trust. Its goal is to help digital news audiences differentiate authentic from inauthentic news by creating signals or “trust indicators”. The Trust Project is composed of a coalition of 70 organisations including BBC, Google, Financial Times, Vox Media, The Washington Post or Zeit Online. Finding out what the public values in the news; what helps people trust news; what has broken their trust or how these experiences and feelings intersect with the mission and values of journalism are some of the questions fuelling the Trust Project. Its director Sally Lehrman, whose journalistic credentials include a Peabody Award and a John S. Knight Fellowship, started the New Media Executive Roundtable and Online Credibility Watch in 1997. Maybe she foresaw a world where fake news could affect the outcome of a US election and where 81 percent of Americans would get at least some of their news through websites, apps or social networks. She explains: “News organisations make a lot of assumptions about their audiences and are not always analysing issues around trustworthiness or credibility” The coalition has started to work on these insights to identify a set of critical signals that could then be converted by...
read more

Can you apply the values of the agile manifesto to strategy formulation?

The Manifesto for Agile Software Development came to life in the Wasatch Mountains of Utah in 2001, driven by self-proclaimed “organisational anarchists” from all walks of the software development industry, from extreme programming to SCRUM to Crystal to Pragmatic Programming. By putting their minds together, they have managed to change the paradigm in software development processes. Thumbs up to these inquisitive souls. The manifesto, which supports an alternative to documentation driven, heavyweight software development processes, has the following core values, meaning that those on the left are valued more and are desirable Individuals and interactions over processes and tools Working software over comprehensive documentation Customer collaboration over contract negotiation Responding to change over following a plan You’re probably wondering what all this has to do with strategy formulation. At Vaibmu, we strive to apply these values to the strategy formulation process, constantly experimenting and discovering better ways to bring agility into our projects. On a high level, and in terms of the four values of the agile manifesto, we could map the approach we use in our customer cases as follows: Individuals over interactions We start each case trying to make sure that we identify those parts which are based on assumptions and not facts, and find ways to test them (very much in the spirit of Eric Ries). Big eyes and big ears. Listen. Observe. Ask. Explore. Understand. Over one or many sessions where the issues are located and where the stakeholders are based, we communicate as much and as candidly as possible to fully understand their needs. Direct interaction, exploration, fluid and direct communication are key. Without this transparency, we...
read more

Working on the future of retail

Project AtTRACT – An immersive Approach To RetAil CusTomership, kicked-off last week in Madrid, Spain. This is a Eureka Eurostars applied research project focused on building a tool that will enable European retailing SMEs to leverage the opportunities omni-channel commerce brings to the retail segment. The AtTRACT solution proposes a Software as a Service (SaaS) which will provide a uniform yet personalised purchasing journey to shoppers in small retail outlets by connecting information from disperse channels (eg. social media, history of web-shop navigation, in-shop information…) into a mobile app. The mobile app will create a bridge between the small retailer and its final customer, allowing 1) the convergence of information between real and digital worlds and 2) the transmission of non-intrusive, customised marketing messages. The consortium working on AtTRACT is lead and coordinated by Anova IT Consulting, and consists of four research partners and one retail partner from three EU countries: Global e-commerce solutions provider OSF Global Services, based in Romania; Spanish group Anova IT Consulting; Spanish leading big data analytics company Pragsis, and the specialised business design and strategy development consultancy Vaibmu, based in Finland. The retailer that will test the resulting product is Alambique, an iconic kitchenware shop and cooking school located in the heart of Madrid, Spain’s vibrant capital. Their presence in the project will allow the research partners to validate the product in a real-life omni-channel retail environment. AtTRACT has been selected among hundreds of innovation projects by the Eureka Eurostars programme, a European initiative focused on the development of highly innovative projects with close proximity to market. AtTRACT has the support of the local funding agencies TEKES (Finland), CDTI (Spain) and ANCS (Romania). The total budget approved for this project is...
read more

Selling a small food company: my short story

Last July, we signed the Share Purchase Agreement for 100% of the shares of a small food importer and e-retailer I founded 3 years ago in Helsinki, Finland. It was an exciting, happy-end-to-my-venture yet humbling experience. The process taught me a few lessons about negotiation, organisation and expectations management. So here’s the little story, as it might be of interest to other entrepreneurs undergoing a similar process. Background: the motivation to sell or terminate a business The process started from my desire to focus my energy on my research and consultancy business. While running the latter, I had launched and managed to grow, part-time and with the help of highly competent and committed people, a little gourmet food business. However, my cost-of-opportunity meter was telling me to focus, and while I enjoyed the gourmet food experience, my heart was calling me in another direction. Then, my husband was offered a job in London, and this gave the final tilt: I was determined to sell or close the business ahead of leaving Finland in the summer. Sometimes events outside our control will make the final push, sometimes you just have to ensure to follow through and re-align your focus where you want it to be. The steps once the ball gets rolling At first, I was not even thinking to advertise the business for sale (it was such a personal enterprise; placed in a small niche and -last but not least-, I have a tendency, like many, to undervalue the fruits of my own efforts). Besides, I did not even know where to put an ad for it in Finland! Then one evening, almost as a reflex movement in my local expat community, I...
read more

Street Food behind the scenes. Does good, tastes good!

Recently we celebrated Streat Helsinki, a great festival on a mission, Streat Helsinki “develops diversity in food culture”. It sees street food and its makers as a part of the city food chain and as a part of a lively, inspiring city. In addition to events and yummy street food, it concentrates on street food development in Finland. It also has many interesting workshops and adjacent events. In one of those we had a chance to listen and talk to one of the world’s street food pioneers, Geetika Agrawal of San Franciso’s La Cocina. La Cocina is the non-profit behind the arch-famous San Francisco Street Food Festival. The mission of La Cocina is to cultivate low-income female food entrepreneurs as they formalise and grow their businesses. This is done by providing affordable commercial kitchen space, industry-specific technical assistance and access to market opportunities. La Cocina’s vision is that entrepreneurs gain financial security by doing what they love to do: “creating an innovative, vibrant and inclusive economic landscape”. The food industry has a high cost of entry: the fees for licensed and insured commercial kitchens, the start-up costs to open a restaurant, the standards set to compete for shelf space at specialty stores and large retailers… food entrepreneurs face an uphill battle for success (take it from me, been there!). And it’s an uber-crowded market. La Cocina provides a platform for these motivated people to hone their skills and successfully transition into the highly regulated and competitive food industry. For this, it follows the model of a business incubator, providing community resources and an array of industry-specific services (e.g. affordable commercial kitchen-space, technical and legal assistance, business expertise) to...
read more

Atlassian wins by: “Open culture, no bullshit”

At Vaibmu, we are working with great researchers and developers on U-Qasar, an open and flexible solution for integrating quality monitoring data that comes from developing software (Software Quality Assurance or SQA). U-Qasar has started as a European funded project (FP7), and it is the goal of the consortium that the knowledge and product created in the project lives after the project ends on September of this year. Vaibmu’s role in this project is to help the consortium decide how to make U-Qasar sustainable in a way that it brings value to companies using it. As many other companies and initiatives starting up, we are using Atlassian solutions, a Confluence wiki to manage the project and a Jira instance to track the software development process. How did Atlassian solutions become so universal? This blog post will try to explain it, and at the same time help us clarify our thoughts about possible ways forward for U-Qasar. Atlassian is an Australian company funded  by college friends Mike Cannon-Brookes and Scott Farquhar in 2002. Back then, their goal was to do something more interesting than what their college was offering, with humble financial expectations: to earn as much as a junior consultant. It took them a couple of years to even earn that much. In this period, they found out that they wanted to enter the enterprise market, and disrupt it with a different business model. Their first product to reach the market was Jira. Originally a bug-tracking software to compete with Bugzilla, from Mozilla, in the enterprise market. From the need to document the knowledge around Jira, they developed a wiki, which...
read more

Are you running lean?

One of our research projects, U-QASAR, has the mission of creating a flexible Quality Assurance, Control and Measurement Methodology to measure the quality of Internet-related software development projects and their resulting products. We are in the last year of the project and focused on making a business case to turn our consortium’s extensive research, methodology and platform into a commercial product. In this process, we recently started to use Ash Maurya’s Lean Canvas (from his book “Running Lean: Iterate from Plan A to a Plan That Works”). “Most of the answers lie outside the building -not in your computer, or in the lab. You have to get out and directly engage customers” In Maurya’s approach to business model canvassing (this term comes from the excellent book “Business Model Generation” by Alexander Osterwalder & Yves Pigneur) the key is approaching a business as a problem to be solved. This is an ideal way to start working on defining the solution from the start. Asking yourself first what are the top 3 problems and then what would be the top 3 features / services that would make up the solution provides a quick framework to rapidly test from. When applied to a customer segment (remember that the elements of a business model may have pretty wild fluctuations based on different customer segments!) you have a good start to dig into the rest of the canvas. Then, empirical work should begin. As soon as you have a quick draft or inkling of your service, you can supercharge yourself to the potential customers and start gathering insights and feedback. Customer centric business modelling is at its best when you can bring the potential...
read more

How your mind really works: strategic intuition

In the course of a delightful and lively chat on strategic routes, our friends over at Synnovatia provided a very insightful document on how traditional approaches to problem solving in the US Army have been, to a certain extent, trying hard to “separate” two ways of thought and analysis which are, as Neuroscience has proven in the past decade, inextricably interrelated. Analytical thinking and strategic intuition, or what Carl von Clausewitz in the early 19th Century described as coup d’oeil. As he articulately explained, “if one is to get safely through this perpetual conflict with the unexpected, two qualities are indispensable.” The first is figuratively expressed by the French phrase coup d’oeil. The other is resolution. For Clausewitz, coup d’oeil is “the rapid discovery of a truth which to the ordinary mind is either not visible at all or only becomes so after long examination and reflection.” We read in William Duggan’s research that Army planning takes three main forms: Army problem solving, the military decision-making process (MDMP), and troop leading procedures (TLP). In all three forms, “the planning process structures the thinking of commanders and staff while supporting their insight, creativity, and initiative”. On the surface, he claims, there is nothing wrong with this statement. “But look deeper, and you find the old model of the brain: structured analysis on one side, and unstructured insight and creativity on the other”. Analysis vs Creativity? Strategic intuition, in contrast,“blends analysis, structure, insight, and creativity so thoroughly that you cannot unravel them.” Army problem solving “provides a standard, systematic approach to define and analyse a problem, develop and analyse possible solutions,...
read more

A U-QASAR review meeting in Brussels @EC

One year to go in the U-QASAR project, and the U-QASAR team visited Brussels for the last Review Meeting at the European Commission before the final report. The importance of this meeting cannot be overstated, and the preparations started some time before with the Innopole team coordinating all the reports and deliverables from the rest of the partners. At the meeting, a panel of three experts evaluated the progress made since the last Review Meeting, one year ago. In a project like ours, with eight partners and quite a few deliverables, we scheduled about 24 presentations to summarise what has been done and what will be done… quite a bit of slide-ware! This resulted in filling up the day for the review, and being demanding both for the team and the reviewers. Thus, before the meeting, a pre-meeting was conducted to rehearse and polish the presentations to be given, in order to make them more palatable. Reviews are important per se, but it is now that U-QASAR ramps up the development of the QA platform, that the feedback from the reviewers will help us see the bigger picture and perform a reality check. From the inside, progress may look rosy, but external eyes will quickly identify challenges not yet considered by the team. The reviewer panel is really expert, a big advantage when you have done your work, as then, they will focus on improving it, by giving valuable comments. One big take away from the meeting is the ambitious scope of the project and the need to re-scale it. In any case, we are in track to present...
read more

SALT! Our journey into the future of grocery shopping

SALT: e-grocery SociAL Trust is a 2 year research project funded by the EU Eureka Eurostars program. SALT addresses the lack of revenue focused turnkey solutions to build trust in e-grocery transactions and exploit s-commerce trends. It aims to add value to e-grocery by generating trust in undecided customers buying experience products. This will lead to an overall increase of e-grocery companies’ turnover.

read more

Knowledge: a strategic resource?

This end of summer we have been busy working on a few exciting project applications. One of them had us thinking hard about KBV, which we would like to briefly discuss. According to the Knowledge-Based View (KBV) theory, knowledge is the most strategic resource of any company. This perspective models the company as a repertoire of knowledge residing in individuals. From this viewpoint, the reason a firms even exists is to integrate such knowledge effectively and efficiently for the production of services and goods. To facilitate such integration, knowledge transfer and hence communication becomes a critical business tool. However, to share or transfer knowledge, there must be a common understanding among stakeholders. According to the KBV, to effectively coordinate knowledge share or transfer , the kind of dependencies that exist between the company units have to be understood first, i.e. whether they are sequential, pooled or reciprocal. Then the organisational structure should be designed or adjusted based on the type of dependence to facilitate transfer. Sequential: when one unit in the overall process produces an output necessary for performance by the next unit, like in an assembly line. Pooled: each organisational unit performs separate functions and, while departments may not directly interact, each does contribute individual pieces to the same overall puzzle Reciprocal: similar to sequential interdependence in that the output of one department becomes the input of another, with the addition of being cyclical For example, for sequential or reciprocal dependence rules and routines can be emphasised so that knowledge transfer can be economised whereas, say, for complex or unusual problems, a pooled structure performs better. Nowadays we often see this, for example, in product development teams, which are increasingly cross-functional. Alternatively, when coordination demands...
read more

Growth in mature businesses

Mature businesses typically attempt to grow by exploring new businesses opportunities. However, in their pursuit they often encounter structural problems which rise from diverse business needs, both in their existing operations and in potential emerging activities. The existing business guarantees returns and emphasises efficiency, whereas emerging businesses demand innovativeness and are often under threat by the existing structure and systems which highlight disciplined and efficient execution. The two commonly used approaches by companies to address this dilemma include: Incubate and nurture new businesses within the existing corporate structure. Structurally separate the emerging business. Both these approaches have their pros and cons. Structural separation provides protection from politics and bureaucracy in the large organisation but at the same time limits access to a larger pool of corporate resources, which in turn could provide the much needed boost to new businesses. On the other hand, structurally separate entities can develop innovative ideas and projects rapidly, but they later encounter trouble in integrating with the parent organisation. However, as argued by Garvin & Levesque (2006), to successfully grow new businesses, rather than complete structural or integration changes, companies should strive to i) achieve and maintain a balance between trial-and-error strategy formulation with rigor and discipline, ii) balance operational experience with inventiveness and iii) balance a new businesses’ identity with integration. i.e. Having both of these worlds under the same umbrella but with the necessary provisioning required for them to prosper and coexist. This in a sense, can be seen as taking the pros of both structural alternatives mentioned. Reference: Garvin, D. A., L. C. Levesque. 2006. Meeting the challenge of corporate entrepreneurship. HBR 84(10)...
read more

Are you innovating enough? A toolkit to make an audit

As part of our EU project ExtremeFactories, we have developed a practical and hands-on innovation workbook for companies who wish to adopt a systematic innovation methodology. The workbook provides several useful frameworks and techniques. In this entry, we will describe the framework used for assessing the innovation environment of the company. Govindarajan et al (2011) present a very quick and easy assessment for analysing the innovation potential of the company. Below we present their framework which we also use in ExtremeFactories’ innovation workbook to assess the company’s’ readiness to adopt an innovation methodology. The framework asks to rate nine elements for your company from 1 (poor) to 10 (outstanding) and count the total. The authors have set the magical number of 70 to be classified as a company with an innovative environment. A compelling case for innovation – the people in the organisation have to understand why innovation is necessary An inspiring, shared vision of the future A fully aligned strategic innovation agenda What business are we in now and want to be in going forward? What is our risk tolerance for pursuing big, game-changing ideas? Visible senior management involvement A decision-making model that fosters teamwork in support of passionate champions. It’s not only about metrics, it’s about “the educated gut” A creatively resourced, multi-functional dedicated team (project champions, relevant capabilities and expertise; naive, seemingly irrelevant diversity; open-minded exploration of the marketplace drivers of innovation) Willingness to take risk and see value in absurdity A well-defined yet flexible execution process When all these factors are present in the organisation, does it smooth the adoption process for innovation methodology? Does it raise the likelihood of success? On...
read more

From e-commerce to s-commerce?

Social media and e-commerce platforms are increasingly converging and thereby giving rise to the phenomenon of “social commerce”. According to a survey by Mediabistro, 74% of consumers rely on social networks to guide purchase decisions, 34% choose a social network over an e-commerce site & 55% share their purchases on social networks. This tells us a bit about the trends. It still seems difficult to get any measurable impact (ROI) from social commerce, but it does seem that the market is set to grow in the near future given the engaging and social aspects of s-commerce. S-commerce itself is expected to hit revenues of 30 billion USD within 5 years according to a study conducted by Booz & Co. Given that it’s still an emerging trend, so far there’s no agreed upon definition (to our knowledge) of what constitutes a social commerce transaction. Does a transaction on a social media platform constitute s-commerce or is it the usage of social features (ratings, wish-lists, suggestions…) on e-commerce site that makes s-commerce a reality? What should be done in this market which is nascent? Which strategies will work? Will commercial transactions on social media platforms actually turn people away from them? Do people love to make purchasing decisions socially and online? Will an e-commerce site with an handful of social features plugged in generate more sales or should we expect new more convulsive solutions? Whether your choice is to wait and see how the market develops or to jump in right away and start experimenting, we’ll be watching the emergence of social commerce sooner rather than...
read more

How do classifieds players want to pay for tech licensing?

At Vaibmu, we recently conducted a survey-based research on uptake trends of value-added features by digital classifieds. We also asked C-level executives of leading classified and media companies worldwide how (and if) they would be willing to pay to outsource value-added features or services from a third party. As we know now, in contrast to vendors expectations -who often prefer revenue share or service-usage based payments-, companies from 15 countries who responded to the survey, actually preferred a flat monthly payment for the licensed services. How surprising do these results look to you? If you would subcontract an external technology offering, which pricing arrangement would you prefer? (If you are interested to know more about our research, please get in touch with...
read more

Cultural sensivity in cross-border deals

Culture is the shared idea and belief about what is normal and desirable in a specific group of people. When dealing across borders, interaction with individuals with a different set of beliefs is very likely. In such situations, one needs to ensure that their counterpart is not dishonoured or feels less trusted just because they touched their nose or looked directly into their eyes. This requires cultural sensitivity and preparation. A good starting point for this is to create a list of Dos and Dont’s when dealing with other cultures. Here is a good list, suggested by Sebenius (2002): Greetings: How do people greet and address one another? What role do business cards play? Degree of Formality: Will my counterparts expect me to dress and interact formally or informally? Gift Giving: Do business people exchange gifts? What gifts are appropriate? Are there taboos associated with gift giving? Touching: What are the attitudes toward body contact? Eye Contact: Is direct eye contact polite? Is it expected? Deportment: How should I carry myself? Formally? Casually? Emotions: Is it rude, embarrassing, or usual to display emotions? Silence: Is silence awkward? Expected? Insulting? Respectful? Eating: What are the proper manners for dining? Are certain foods taboo? Body Language: Are certain gestures or forms of body language rude? Punctuality: Should I be punctual and expect my counterparts to be as well? Or are schedules and agendas fluid? However, in business negotiations one typically needs to know more than Dos and Dont’s. Especially, the mapping of the key players (who is who and who decides what) and  figuring out the process of decision making (is it hierarchical or consensus driven) is very useful in cross border...
read more

How to make acquisitions work

Anslinger and Copeland’s article Growth Through Acquisitions: A Fresh Look provides a very interesting peep into what makes leveraged buyout (LBO) firms’ deals successful. They have seen, in contrast to conventional wisdom, that even non-synergetic acquisitions can be made profitable. The success recipe to make acquisitions work lies in the acquirer’s operating model, which is based on the following seven principles: Insist on innovative operating strategies Don’t do the deal if you can’t find the leader: Evaluate current executives; look for managers within the organisation who are not yet in leadership positions; hire outside industry experts Offer big incentives to top-level executives: A decent stake in the company Link compensation to changes in cash flow: Tie a substantial amount of total compensation to annual performance measures Push the pace of change: Most of the actions required to create value are taken in the first two years after the deal is closed Foster a dynamic relationships among owners, managers, and the board: Rather than creating a multi-tier, bureaucratic structure, successful acquirers create flat organisations Hire the best acquirers: Successful buyer’s deal makers are highly skilled professionals with outstanding credentials The authors suggest that companies can follow the success of financial buyers in non-synergetic acquisitions by following these principles and developing acquisition capabilities in one of the three ways: 1) Evolving them in-house when a company is already entrepreneurial and growth driven. 2) Creating an acquisition unit outside the core organisation where ‘non-conforming additions’ are likely to be in conflict with existing systems and culture. 3) Getting outside assistance if the current team is inexperienced and carefully align their interest with yours For a company to become a successful acquirer, executives must think in...
read more

The silent killers of strategy implementation

Many difficulties lie between the ideal of strategic alignment and the reality of implementation.The article on strategy by Beer and Eisenstat (2000) is always a good read when your own is not functioning well. Here we provide a brief summary of some of their findings, which can be directly taken into practice. Six silent killers of strategy exist in most companies, but too many managers avoid confronting them. The authors have created a method to unearth the root causes of strategy blockers, titled as “Organisational Fitness Profiling” (OFP). OFP is an organisation-wide assessment process that utilises data collected throughout the organisation to identify enablers and barriers to achieving the organisation’s defined business strategy.  The steps of OFP include: 1. Create a statement about direction The senior management team develops a statement of strategic and organisational direction. This will be used to communicate the strategy to the organisation, explain the logic behind it and collect organisational information on barriers to implementation 2. Collect data on barriers and strengths A task force of well-regarded middle managers is formed. They conduct open-ended interviews inside and outside the organisation in order to find management practices and organisational arrangements that hinder strategy implementation. The information is analysed together and major themes are identified. 3. Develop an integrated plan for change In a three-day feedback session the top team receives a thorough and candid account from the task force. The top team analyses the underlying causes and develops a broad vision for redesigning the organisation. An implementation plan is made that focuses directly on improving business performance. 4. Refine the plan The top team and task force will review the plan together. This works...
read more

Born global?

Traditionally internationalisation has been considered a turf for mature companies, which typically employ this strategy when they have already attained domestic success. However, this notion has been challenged more and more by companies that internationalise at or near inception and are referred to as born globals or global start-ups.  When analysed, born globals seem to have a unique set of capabilities which allow them to test international waters early on. As suggested by Karra et al. (2008), these capabilities include: International opportunity identification: ability to identify opportunities across borders, which requires international awareness as well as knowledge of foreign markets. Institutional bridging: ability to bridge differences in different national business environments. Preference and capacity of cross-cultural collaboration: ability to develop cross-cultural relationships with international partners. These capabilities in born globals are mostly a virtue of their founders who often have prior international experience and a dense international network developed  through their education (e.g. MBA) or by their prior work assignments. Companies which think they possess these capabilities can further assess their needs and tools required for a successful internationalization using the checklist by Sanders and Carpenter (2008): References: Carpenter, M.A. & W.G. Sanders. 2009. Strategic Management: A Dynamic Perspective, 2/e, NJ: Prentice-Hall. Concepts and Cases. Karra, N., Phillips, N. & Tracey, P. 2008. Building the Born Global Firms: Developing Entrepreneurial Capabilities for International New Venture...
read more

The ‘agile’ way of innovation

The concept of “agile” was developed in the field of software development. It emerged when the field was dominated by traditional heavy weight approaches which were rigid in the development process and therefore were slow in reaction to changing market demands or customer requirements. Although, the practice is widely used in software development, its process is now making inroads into other industries mainly due to the ever increasing uncertainty in the business environment. Agile practices are a set of engineering best practices that allow for rapid delivery of high-quality product/services, and a business approach that aligns development with customer needs and company goals in an efficient manner. In project management terms, it generally promotes a leadership philosophy that encourages teamwork, self-organisation and accountability. One of the main characteristics of the agile methodologies is its iterative approach. Agile practices do recognise failure and the ability to learn from it as a part of the process. When pursuing innovations a company hardly gets it right the first time or the second time or the Nth time. What matters is the persistence of the company and its efforts to continue exploration. Therefore, the innovation management process has to be iterative by nature because highly disciplined execution is likely to crush innovation. An Innovation Strategy may be composed of a number of strategic lines, comprising several innovation objectives. Achievement of each innovation objective should be an iterative process.  This process starts with the scheduling or planning of a number of activities and milestones in a short period of time (Small Releases). These activities (proposal of ideas, elaboration of prototypes, etc) are performed and validated (Testing) and the...
read more

A way to determine an optimal strategy choice

In the process of strategy formulation a company is often faced with multiple strategy choices. These are all based on thorough strategy analyses of the external environment as well as its internal situation. A key question then is how to choose amongst several strategic choices available to the firm. A logical path would be to choose the one(s) with better chances of success. A success criterion of a strategic option is therefore often needed to assess its probable, well… success. One such criteria, defined by Johnson et al., (2008), is to assess strategy options on their Suitability, Feasibility and Acceptability (SFA). Suitability It analyses an organisation’s position first and then changes in the environment and assesses the fit between these keeping in view the organisational goal (expectation of stakeholders). It evaluates the rationale of the strategic option. It is made possible by using several concepts and frameworks, including: understanding environmental factors and spotting growth opportunities (e.g. PESTEL), possible future scenario planning, analysing industry competitiveness (e.g. 5-forces or system dynamics), strategic group analysis, core competence, value networks, legitimising strategy for stakeholders and cultural fit. One needs to define suitability criteria for assessing the strategy e.g. it could be environmental suitability, capability suitability and expectation suitability. Such criteria establishment should be more contextual and could vary across different companies. It should also be further categorised (or perhaps operationalised), currently it is quite macro in nature by having 3 conceptual constructs. Having established suitability criteria, the next thing is to have a selection criterion. This could be based on ranking (score cards): each strategic option is scored against the assessment criteria (which could also be weighted),...
read more

Reflections on succession and growth in family businesses

Growth is tricky in family owned businesses and is quite different from corporate growth. Family and business overlap can be very dangerous, if not managed carefully. Because one is typically emotionally driven and subconscious whereas the other is task based and conscious. When a sudden leadership vacuum is created (e.g. by illness or death) and there is no qualified substitute immediately (who can take charge and make independent decisions) available, the family business is in deep crisis. Nothing much can be done at this time, which calls for a viable (and prior) strategy of avoidance, which can be achieved by training a successor from very early on. In a family business, there often arises a situation when personal and business matters mingle-up and affect each other. Therefore, family businesses should have clarity on “family-first, then business” or “business-first, then family” kind of priorities. Succession becomes a pain in family businesses especially when personal relations are intense. Then a neutral third party involvement (e.g. consultants) can be an option forward. They can facilitate bridging the communication gap and reach a consensual point. Succession is very tricky when there are multiple successors e.g. when the father wants to be relieved from the business and has two sons waiting to take charge of it individually.  One of them had been involved with the company for long but now the other one also wants to enter the business and is more qualified and both want the leadership role. Barnes and Hershon (1994) argue that business growth/transition from one stage to the other should happen alongside the succession and the senior who is about to retire has to...
read more

One way to internationalise

The initial questions to answer are what we should internationalise: is it a technology or a market roll-out? The main concerns are quite different for each option, e.g. in technology roll-out developing partners/R&D are crucial whereas in a market roll-out opening of sales offices/distributors are of major concern. Once defined, the company should decide where to go: this can be defined by market characteristics and the firm’s motives (product-market match). There are several entry modes of internationalization, the ones which offer greater control across the value chain and returns are of greater risk. The internationalization process can be conceptualised as follows: Figure: Internationalisation entry strategy (Prof. Thomas Keil, Aalto University) The traditional view of internationalization is that the company should start with nearby geographies and then expand to far ones. The selection of entry modes should be simple at first e.g. exports/licensing and then, as the firms internationalization capability matures, it should add more complex entry modes to its portfolio e.g. acquisition/greenfield. But then there are born global firms which begin their internationalization quite early and often in multiple geographies using complex entry modes. They seem to have enjoyed considerable success as well (e.g. Rovio Mobile, Dealdash, Supercell). Both early and late internationalization have their own benefits. Early internationalization establishes the international identity for the firm, provides faster learning and potential for non-linear growth. Late internationalization, in turn, enforces the domestic identity of the firm, provides relatively secure and steady growth, and has a higher survival rate. Therefore, timing is a key factor in the internationalization process. Reference: Lectures on Strategies for Growth and Renewal by Prof. Thomas Keil, Aalto...
read more

Agile and fun training for C-level managers

Vaibmu has been invited as a speaker to present at the International Classified Media Association (ICMA) conference in Cologne, Germany on 17-20th April 2013. Along with our partner INNOPOLE, we ran the Business Operations Forum. This is a session within the ICMA General Meeting targeted to business professionals including CEOs, VPs, CTOs, CMOs (…). This session included managers and consultants from 12 different countries! The forum provided a fun and pragmatic training on how to run businesses more efficiently using agile methodologies and specifically SCRUM. Although rooted in software industry agile practices, it has a lot to offer to all business units as well as the whole company operations. The presentation was divided into three parts: Introduction to Agile, Agile Practices and Agile Manifesto Experiencing agile exercise: Using Lego City Blocks (this was fun!) Implementing agile within an organisation We started with defining what agile actually means by highlighting three notions which depict it: Quickness, Ease of Movement and better Adaptability and highlighting some of they key benefits of being agile: reduced cost, increased productivity, responsiveness and employee empowerment. This was followed by the principles of the Agile Manifesto. We then focused on the SCRUM methodology of agile and explained the process and its main elements: the roles in SCRUM, backlogs, sprints and its planning, velocity, reviews and retrospective. Then we proceeded with the exercise session on using SCRUM in practice by Lego city blocks. The audience was divided into groups and were provided a set of requirements and corresponding user stories. Teams then assigned different SCRUM roles within their ranks and followed the SCRUM methodology in constructing the Lego city with a very...
read more

Capturing value from innovation

To be able to profit from innovation it is vital for a company to ensure that it captures value resulting from it, as it is not always that a company who innovates makes the profit from it. A classic example of this can be seen in the invention of the personal computer by Xerox, which resulted in no gains for the innovator. According to Teece (1986), there are three main factors which influence whether the innovator can capture value, namely: appropriability regime, complementary assets & the dominant design paradigm. Let’s look at these in more detail. Appropriability denotes the ability to capture value. It is determined by the nature of technology (e.g. difficulty of imitation) and the efficacy of legal mechanisms of protecting IPRs. These factors vary across industries and geographies. Factors which influence appropriablity also include tacitness and complexity of innovation. The more tacit know-how an innovation encompasses, the more it becomes difficult for imitators to copy or re-engineer it. Apart from tacitness, legal mechanisms like patents, trade secrets and copyrights also strengthen the appropriability of the innovation and increase the likelihood of capturing value from it. Complementary assets, in turn, refer to the assets, infrastructure or capabilities required to successfully commercialise and market the innovation. Companies which innovate but lack access to complementary assets are unlikely to profit from their own innovations. Finally, dominant design refers to a de facto standard in an industry. When a new industry emerges it struggles with the right product/process initially until it reaches a point where a product/process becomes a de facto standard and gains legitimacy. Emergence of dominant design has...
read more

Achieving organisational ambidexterity

The ability of a company to efficiently manage its ongoing activities and at the same time prepare for tomorrow’s challenges is the crux of organisational ambidexterity, as simple as it may sound. But rarely an organisation is good at both exploitation of its current business and exploration of future options. In practice, we see it rather happening in a time sequenced fashion e.g. Nokia’s first ‘explored’ mobile phone business when it was a consumer electronics company back in 1980s and then exploited it well for two decades. However, failed in exploring and then exploiting the future business options (smartphones and tablets) during the 2000s. But theoretically speaking, Nokia could be well considered an ambidextrous organisation. Because, one way to achieve ambidexterity is to separate your exploration-driven departments (e.g. R&D) from the rest which continue their operations as a well-oiled machine. In this regard, every multinational is an ambidextrous organisation to a certain extent. But what seems to be a problem in this equation is the resulting isolation from core business. So even though the company is structurally ambidextrous, it still fails to capitalise on it. One way forward is for companies to aim for contextual ambidexterity rather than structural ambidexterity, which operates at the individual level and calls for employees to make independent choices in their day-to-day operations between alignment-oriented (exploitative) and adaption-oriented (explorative) activities as suggested by Birkinshaw & Gibson (2004). Differences between the two are presented below: Source: (Birkinshaw & Gibson, 2004) The authors found that ambidextrous individuals have similar characteristics: They are willing to take the initiative They welcome cooperation They are brokers They are multitaskers However, having the right employees and Human Resources policy is a necessary but not a...
read more

Decision making: economic rationality or emotion galore?

The article by Bertrand et al. (2005) provides an interesting perspective into how psychological factors interfere with economic rationality in consumer decision-making. They tested several factors which seemingly looked irrelevant from a cost-benefit analysis perspective but do influence consumer decision-making significantly. The study sample is taken from the consumer credit market in South Africa. It is launched with a lender which micro-finances (mainly cash for short term with high interest rates) the ‘working poor’ population of South Africa and places no restriction on the proceeds of loan. The lender sends a direct mail solicitation to its 53,954 clients with a new loan offer. Each offer is randomised with different interest rates (economic factors) and marketing manipulations (psychological factors). The sample is also subdivided into a low-attention group (less likely to pay attention to the offer) and a high-attention group (more likely to pay attention to the offer) based on frequency of borrowing. Offers are manipulated in their marketing message based on: description of the offer, comparison of the offer with the competitor rates, subtle features like photo on the offer and loan usage suggestion. The effect of the varied marketing messages is described below: Description of the offer: People who received an offer with a small tabulated description (only one loan repayment example) in contrast to offers with multiple terms, are more likely to take-up the offer, with differences as large as 2.3 interest rate percentage points. This contrasts to the premises of the economic theory of choices, which would support decision-making based exclusively on interest rate differences. Competitor rate comparisons: This had no significant effect on the take-up decision,...
read more

Business model innovation: a game changing strategy

According to Markides (2008), successful invaders change the rules of the game by coming up with a whole new strategy and innovative business model. Business model innovation is the discovery of novel business models in an existing industry. Such an innovation either gets previously non-consumers into the market space or gets existing consumers to consume more. The innovators offer a value proposition which is quite different from competitors and they appeal to a different consumer segment in the first phase. To serve such a segment, organization structure and activities set up by innovators are very different and often conflict with incumbent players. So this model of innovation does not appeal to established players as much as to newcomers. The first step in innovating is discovering the business model. In order to do so Markides claims that a company needs to challenge its existing business model, its current WHO-WHAT-HOW position, i.e. who its customers really are? what it offers them? and how it plays the game? If a company can successfully redefine its customers or identify new customers (WHO), it then has to develop a business model to cater to the needs of those customers. This model will probably be different to the one used to serve current customers. The trick here is to pick the right niche, which can grow substantially. Business model innovators also need to offer a value proposition which is substantially different from the existing one (WHAT). The new offering should raise interest in a big enough customer segment and be difficult for competitors to imitate or substitute. Business model innovation takes place when a company tries to...
read more

Diffusion of innovation: how people make sense of things

The case of Edison’s Electric Light innovation, which disrupted the status quo, is an interesting example of  how the design of the system can facilitate the diffusion of an innovation. Hargadon and Douglas (2001) argue that sense-making happens in the context of existing apprehensions, so when introducing a novel product/service/system an innovator has to design the system in a way that it provides cues to the user through which they can comprehend it (using their existing mental schema). At the same time the innovation also has to provide cues through which its novelty can be understood, appreciated and used. Edison did this by making several design choices (at times inferior ones) to make his novel electric lighting system mimic the existing gas lighting system, so that people could understand its value. Besides this, the design has to be robust enough to have room for the new features/uses to evolve as people’s familiarity with the newness increases over time. Such disruptions, which often involve changes in the actors and their roles, interactions and behaviour, preceded by changes in people’s mental schema and scripts (sense-making), are also referred to as institutional change. The article by Hargadon and Douglas (2001) describes how robust design can help diffuse the novel system. However, it does not really define the process of making robust design. For example, TiVo with their introduction of the digital video recorder in 1999, tried to do the same, but they were unable to evoke cues through which people could exploit the novelty of the system. Now the question of choosing to present consumers with some old familiar features, some novel ones and perhaps...
read more

Sources of innovation: the case of the knowledge broker

Innovation can arise from several sources e.g. individuals, firms, research institutes, non-profits and/or the linkages between them. But what makes some individuals or companies more innovative than others? Is it the creativity of the individuals? If so,  companies’ Human Resources policies matter the most? Of course that does matter, but other things count too. One popular theory is that of Professor Ronald S. Burt on “structural holes”, which refers to two independent social networks with missing links in between them. So knowledge in one network does not flow to the other. Since innovations mostly utilise existing technologies/ideas and use them in a different context, innovations and good ideas are likely to be coming from individuals and/or companies which bridge the structural hole between two independent knowledge networks. These individuals and companies can be referred as knowledge brokers. One classic example is the Edison laboratory where innovation resulted from the engineers’ prior knowledge of electromagnetic power from the telegraph industry, which they applied in lighting, telephone and mining. They often act as a knowledge brokers, utilising the ideas from one industry and applying it to another Another example is design company IDEO. By the nature of their work, designers are exposed to a diverse set of industries which are often unaware of the technological progress in others. They often act as a knowledge brokers, utilising the ideas from one industry and applying it to another (where it can be usefully applied). This may result in an innovative product. However, if you are not a design company how will you take advantage of such a privileged broker position? One possible way forward would...
read more

Growth by alliances or acquisitions?

A first thought is often to do it organically, but it can be very slow in high velocity markets. One alternative is to build alliances and eco-systems with resourceful companies to compete in the marketplace. But then the danger is how an entrepreneurial firm can reap the benefit when working with a large corporate partner. A small company has a high likelihood of losing in the partnership because dancing with an 800 lb gorilla is never easy. Alvarez and Barney (2001), have pointed several options for an entrepreneurial firm to benefit in an alliance with a large company, one is of not partnering at all, but this is quite a slow and costly growth option. The second option is to slow the large firm’s learning pace, but this might in turn slow the commercialisation of its technology, since the large firm might not commercialise it until it has detailed information about the product/technology. The third is to use detailed contracts to define alliance relationships. The fourth is to build a relationship of trust. The fifth alternative is to bring other resources to the table, besides just a single technology. According to the authors the best option available to an entrepreneurial firm is to produce streams of technological innovations and leverage itself in an alliance. In conclusion, both firms can benefit in an alliance if they can manage the technology carefully, recognise their different rates of learning, understand the needs that each is trying to achieve in the alliance and reduce each partner’s risk. Source: Alvarez and Barney (2001) Growth can also be made inorganically through acquisitions but: when to...
read more

The growth stages of a firm

Social fact is that most businesses don’t grow and not every firm is a growth firm. Firms which can grow have high propensity to grow as well as the ability to manage growth. High growth firms score high on both of these factors. Churchill and Lewis (1983) explained that firms grow in stages with age: Existence, survival, success, take-off & resource maturity. Each stage is characterised by an index of size, diversity, and complexity and described by five management factors: managerial style, organisational structure, extent of formal systems, major strategic goals, and the owner’s involvement in the business. Source: Churchill and Lewis (1983) In the existence stage, the owner does everything and the main concern is to get customers. In the survival stage, company has established itself as a business entity and the main problem is to get enough cash flow to sustain the business. In the success phase, company is stable and profitable and key decision is to either use company as a growth platform or the owner decides to disengage. Professional managers are required to take some activities off the owner. In the disengage mode, the company can continue to run at status-quo for a longer period and in the growth mode the owner garners resources to fuel further growth. Recruitment for future company needs and systems required to manage growth are installed. Operational as well as strategic planning is done and the owner is involved in almost all aspects of these processes. Taking off After a successful success phase, the company moves to the take-off stage. The two major concerns here are of delegation (can owner delegate...
read more

Strategic alliance management

Currently, the top 500 global businesses have an average of 60 major strategic alliances each. Yet alliances are fraught with risks, and almost half fail. There has been increasing interest in the characteristics of firms that have created superior alliance capabilities to generate advantage by managing alliances effectively, including the more challenging and complex relationships. One could hypothesise that firms that are able to systematically earn rents from their alliances have very different approaches to managing alliances than others who do not. Literature on alliances points that, relationships that generate these advantages are characterised by: creation of relationship-specific assets, access to complementary capabilities, substantial flow of knowledge between the partners, and the presence of effective governance mechanisms that can limit transaction costs between the firms involved. Research evidence on alliances suggests that such characteristics of partnerships are systematically created by firms not only through careful selection of partners, but also through deliberate investment in these features of their relationships (Helfat et al., 2007). Although alliance capability has been referenced frequently as a driver of alliance success. Yet, there has been limited work on the actual components of alliance capability. In research based both on fieldwork and on surveys of a large sample of alliances, Dyer, Kale, and Singh (2001) find that firms that had an alliance function with very specific activities perform significantly better than those without such functions. There are four processes identified as part of the alliance-management function: 1) improving knowledge management, 2) providing internal coordination, 3) facilitating intervention and accountability, and 4) maintaining external visibility. These processes are interrelated, but different in their foci and locus...
read more

Blue Ocean vs Shaping Strategy: Let’s compare

The two concepts provide complementary but distinct views about positioning a company in a business landscape at a place which is not only profitable but also less contested. Both of these concepts have roots in the Reconstructionist approach, which defends the ‘strategy shapes the structure of industry’ paradigm. Blue ocean strategy refers to a school of strategic thinking where one escapes competition by making it irrelevant, essentially by focusing on delivering value which no one is currently offering effectively in the market. This is attained by tapping into latent demand of customers or by shifting the ‘value’ parameters in the industry e.g. as done by Apple in smartphones by moving the emphasis from technological advancements to user-experience, thus shifting the industry paradigm. However, providing more value (differentiation) alone does not necessarily guarantee success in the long run, one also has to lower the cost structure at the same time. Thus, by pursuing differentiation as well as a low-cost strategy and delivering value (based on untapped demand) companies can reconstruct the market. In order to find a blue ocean, companies need to break-away from contemporary strategic thinking which has over-emphasised competition benchmarking. This is not to suggest that companies should avoid benchmarking competitors, but rather they have to focus more on customer needs and novel value-creation opportunities. Blue ocean strategies are not necessarily about technological innovation but often the novelty in linking of technologies to buyer’s value. These strategies typically accompany a different business model and this is why they cannot be imitated easily. It is always hard to imitate completely new business models due to the cognitive barriers of...
read more

Moscow’s Guild of Press Publishers Expo – Russia’s Media Market Event

Vaibmu attends Russia’s largest media event, the Guild of Press Publishers Expo in Moscow, Russia, celebrated at Swissotel in November 16-17, 2010. Vaibmu was invited to participate in a very dynamic session focused on the evolution of print media in the digital age, presenting with key stakeholders of the Russian media industry. Over 2,500 Russian media executives and professionals attend the Expo every year, which is organised in cooperation with the World Association of Newspapers & IFRA. The day’s sessions – vigorously moderated by the Deputy Sales CEO of Argumenty i Facty Publishing House, Marina Mishunkina – included the following presentations: Market & Trends: Media Advertising Market, results of H1 2010 by Lilia Vladimirova, TNS Media Intelligence Prospects for Advertising in Print Media by Marina Mishinkina, Argumenty i Facty Publishing House Positive & Negative Attributes of Newspaper Advertising by Violeta Rodionova, ZenithOptimedia Trend Formers & News Media Advertising by Georgy Mikaberidze, AFS – IMG PH A New Era of Classified Advertising by Clara Llamas, Vaibmu Ltd. Russian Digital Classified Ad Market by Sergey Osipov, Delovoy Mir Publishing House The Potential of Free Advertising Information Press by Alina Diokonova, VA-Bank Special Interest Media: New Forms of Interaction with Advertisers by Lidia Strekneva, GameLand New Models of Advertising & 3D by Dmitry Ogurstov, Komsomolskaya Pravda Publishing House Marketing 360: Complex Ad Campaigns Using Events by Anton Shishkin, Metro Newspapers...
read more

Learning by doing workshop: web business in 5h

The task Vaibmu organised a workshop at ICMA‘s Business Operations Forum in Vienna, Austria. There were three teams of 5-7 people. The team members were from different companies and countries. Naturally, none of them had been working together before. These diverse teams were given a challenging task that they were expected to execute successfully: Develop, launch and market a real working classified advertising online site within five hours and, when finished, make a 10 minute investor pitch to sell your booming business! To earn full points at the end of the day, the teams had to have a valid and working revenue model, at least 100 unique items in the database, and 100 unique visitors. Quite a challenge! The results All the teams were able to launch and market their site within the time limitation. All of them were able to attract visitors with multiple methods and one of the teams successfully completed all the given milestones with their Just Dogs site. Click the thumbnails below to see the two top sites of the day. They are true online classified advertising sites. The takeaways In this workshop, we had five underlying themes that we emphasised throughout the day. However, to put the focus on the important issues, we provided pre-reading material before the day, rather than simply start working together. On the day of the workshop, this meant that the amount of academic discussion was almost zero and we succeeded in spending the whole day learning by doing. The key takeaways were: Understand the mindset of start-up entrepreneurs – yes, they are the same guys who are planning to enter...
read more

Vaibmu at Russia’s Guild of Press Publishers Expo

Vaibmu’s co-founder Clara Llamas has been invited to speak at Russia’s Guild of Press Publishers’s (GIPP) annual Publishing Expo 2010, which will take place in Moscow, 16-17 November 2010. After the presentation there will be panel discussion about the future of classified advertising. As an industry organization GIPP’s main goal is to create favorable conditions for the development of the publishing business in Russia. GIPP was established 1998 and is a certified member of the World Association of Newspapers since 2002. More than 2,500 media and publishing professionals will attend this edition of the GIPP Publishing Expo in Moscow’s centrally located Swissotel Krasnye...
read more

Get in touch
+44 7940 740324

 

Stay connected on Linkedin & @vaibmu or visit our blog