http://www.devilsadvocategroup.com We Stress Test Your Strategies Wed, 11 Aug 2010 23:46:43 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 http://www.devilsadvocategroup.com/google-fails-and-still-succeeds-at-innovation/ http://www.devilsadvocategroup.com/google-fails-and-still-succeeds-at-innovation/#comments Wed, 11 Aug 2010 23:46:43 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1358 Two quotes in this article should be tattooed on the wrists of anyone serious about innovating: --"Our policy is, we try things." --"We celebrate our failures." Both quotes, from Google CEO Eric Schmidt, come as the company announced that it was shutting down a real-time collaboration tool called Wave. Rather than say nothing about the failure or try to pretend it's no big deal, as many companies would do, Google acknowledged the failure and called it an important learning experience.]]> http://www.devilsadvocategroup.com/google-fails-and-still-succeeds-at-innovation/feed/ 2 http://www.devilsadvocategroup.com/raw-nerves-exposed-by-our-washington-post-op-ed/ http://www.devilsadvocategroup.com/raw-nerves-exposed-by-our-washington-post-op-ed/#comments Sun, 01 Aug 2010 19:34:26 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1344 We touched a nerve recently with an op-ed in the Washington Post, if the 131 online comments, a letter to the editor, and numerous direct responses are any indication. The piece argued that the U.S. Postal Service needs to change its strategy radically if it is to avoid the fates of other icons such as Kodak and General Motors. Some agreed wholeheartedly. Some called us clueless. While we won't spend much time defending ourselves, there a few points that we’ll make, given the liberty of these additional column inches. ]]> http://www.devilsadvocategroup.com/raw-nerves-exposed-by-our-washington-post-op-ed/feed/ 1 http://www.devilsadvocategroup.com/boeing-the-value-of-gray-hair/ http://www.devilsadvocategroup.com/boeing-the-value-of-gray-hair/#comments Tue, 20 Jul 2010 19:45:31 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1336 Boeing is doing a smart thing by bringing back distinguished, retired engineers to render a second opinion on its plans. (See WSJ, Seattle Times, Seattle PI) Because of the dynamics of how design is done, it's unlikely that anyone employed full-time at Boeing, with a career path to pursue, would say the bosses were smoking dope, as one of the retirees did. And, yet, sometimes people are smoking dope (metaphorically) when thinking about design. We certainly found that to be the case when organizations were setting strategy, in the research project we did for our book. Who can forget the huge cement company that started selling lawnmowers, based on the hazy notion that cement is used in homes and homes have lawns, so the cement company should sell mowers? (The company, Blue Circle Cement, soon filed for bankruptcy and was sold to a rival.) ]]> http://www.devilsadvocategroup.com/boeing-the-value-of-gray-hair/feed/ 0 http://www.devilsadvocategroup.com/the-bp-failure-exhibit-a/ http://www.devilsadvocategroup.com/the-bp-failure-exhibit-a/#comments Mon, 12 Jul 2010 22:36:18 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1329 The New York Times documents the numerous times that British Petroleum had problems with its deep-sea drilling program, yet failed to heed the warnings and proceed more cautiously. The tone of the article is one of shock. But, sad to say, we're not at all surprised. What BP did is, too often, business as usual. As we documented in our book and have said many times in this blog, it's hard to be the guy saying no. If you're the safety guy at BP, you're the one who's raising costs by insisting on safeguards. You're the one who may kill a project entirely. So, you're the one who's taking down everyone's bonus, at least in the short run. ]]> http://www.devilsadvocategroup.com/the-bp-failure-exhibit-a/feed/ 2 http://www.devilsadvocategroup.com/social-media-myths-and-reality/ http://www.devilsadvocategroup.com/social-media-myths-and-reality/#comments Tue, 06 Jul 2010 10:19:19 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1285 Some recent consulting work led us to investigate the impact that social media like Facebook, Twitter and LinkedIn will have on the worlds of investing, investor relations and corporate governance. We found a surprising number of misconceptions--but also a huge amount of opportunity. While we can't give away all the secrets, we do have clearance to provide a public version of our work. Read the report below, or download a PDF of it: Social Media and Investing--Misconceptions and Opportunities--6-2010. (Although we tuned the report for investing and those dealing with investors, some of the insights also apply to social media in other sectors. If you're interested in exploring the implications for those sectors--or investing, of course--let us know.)]]> http://www.devilsadvocategroup.com/social-media-myths-and-reality/feed/ 1 http://www.devilsadvocategroup.com/ebay-takes-dead-aim-at-retailers/ http://www.devilsadvocategroup.com/ebay-takes-dead-aim-at-retailers/#comments Thu, 01 Jul 2010 18:39:58 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1314 While marksmen use laser sights to line up their targets, eBay is using Red Laser. That is the name of a popular smartphone application that eBay recently purchased . Red Laser was already going to cause enough disruption for retailers with a physical presence but, with eBay behind it, it could be a game changer. Red Laser is based on an elegantly simple idea: It uses the camera in smartphones to scan the UPC barcode on a product. Next comes the hard part: Red Laser queries Amazon and other online retailers for the price of the product. It also uses Google product search to find stores nearby where the product is also available, and at what price. The user sees none of the complexity. He just knows that, within a few seconds, he gets a list on his phone of alternative sources and their prices.]]> http://www.devilsadvocategroup.com/ebay-takes-dead-aim-at-retailers/feed/ 1 http://www.devilsadvocategroup.com/little-brothers-are-watching-lots-of-them/ http://www.devilsadvocategroup.com/little-brothers-are-watching-lots-of-them/#comments Thu, 01 Jul 2010 18:09:35 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1303 While technology is providing loads of exciting ways for businesses to know more about customers and how they act, it's important to never lose sight of how leery people are about giving up privacy. Companies need to examine all the potential pitfalls related to privacy and must be prepared to change course quickly--even if they feel customers are being irrational and overreacting. A fascinating recent blog post by David Thompson, co-author of “Wild West 2.0: How to Protect and Restore Your Reputation on the Untamed Social Frontier,” explores how seemingly innocuous advances in technology can add up to major changes in privacy. ]]> http://www.devilsadvocategroup.com/little-brothers-are-watching-lots-of-them/feed/ 0 http://www.devilsadvocategroup.com/bebo-boo-boo/ http://www.devilsadvocategroup.com/bebo-boo-boo/#comments Mon, 21 Jun 2010 20:35:14 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1277 Reports are that AOL, having bought social-networking company Bebo for $850 million two years ago, has agreed to sell it for $10 million. Oops. While we didn't write anything at the time of the purchase--we were in the throes of finishing the writing of "Billion-Dollar Lessons"--we'll go ahead and comment now because one of the main mistakes that AOL made seems like it's being repeated by many others.]]> http://www.devilsadvocategroup.com/bebo-boo-boo/feed/ 2 http://www.devilsadvocategroup.com/wsj-review-of-delivering-happiness/ http://www.devilsadvocategroup.com/wsj-review-of-delivering-happiness/#comments Sat, 12 Jun 2010 11:52:44 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1258 Here is a link to the book review that Paul wrote earlier in the week for the Wall Street Journal about "Delivering Happiness," the memor by the founder of Zappos.com that has spent the week among the Top Ten best-sellers at Amazon. In addition to what's in the WSJ review, which mostly lays out Tony Hsieh's improbable journey from a failed venture selling earthworms to his fabulous success selling millions of pairs of shoes every year, there are a few things worth noting. The book is generally a quick, easy read. It is quirky, but enjoyably so. Hsieh does spend too much time exploring all the aspects of the Zappos culture, as though it's right for everyone, when it clearly is not. He also falls into the trap that is common among memoirists, of quoting himself at full length. We don't need every one of the words in his long memo announcing the acquisition of Zappos by Amazon last year; sure, some of it is funny, and those parts need to be quoted in full, but most of the rest could have been summarized with no loss. The book does contain some underdeveloped, but potentially very interesting, sections on how to apply lessons from poker to the business world and on how the "science of happiness" could inform relations with employees.]]> http://www.devilsadvocategroup.com/wsj-review-of-delivering-happiness/feed/ 1 http://www.devilsadvocategroup.com/putting-the-chevy-in-reverse/ http://www.devilsadvocategroup.com/putting-the-chevy-in-reverse/#comments Sat, 12 Jun 2010 00:10:15 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1265 Acting with surprising swiftness, General Motors has repudiated the silly decision we wrote about yesterday, the one that would have officially done away with the nickname "Chevy" and required that employees refer to the division and its products by the formal name "Chevrolet." Good for GM. We don't believe for a second that the memo reported in the New York Times was simply "poorly worded" or that the memo was just a "rough draft" and "a bit of fun," as GM said.]]> http://www.devilsadvocategroup.com/putting-the-chevy-in-reverse/feed/ 0 http://www.devilsadvocategroup.com/gm-and-chevrolet-a-new-new-coke/ http://www.devilsadvocategroup.com/gm-and-chevrolet-a-new-new-coke/#comments Fri, 11 Jun 2010 01:03:09 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1245 The New York Times reports the stunning news that General Motors has mandated that everyone associated with its Chevrolet division stop using the term "Chevy" and always say "Chevrolet." This should not just be the subject of a bit of fun, though the Times certainly does have a good time with the news. It notes all the places on GM sites that use the offending term, points out the famous racecar driver who will have to change his website to take "chevy" out of the name and even reminds us that Don McLean would have to amend "American Pie" so that he'd drive his Chevrolet to the levee to find that the levee was dry. Beyond its sheer goofiness, the decision points to a problem that causes many companies to fail when they try to innovate: They can't get out of their own heads and think like their customers.]]> http://www.devilsadvocategroup.com/gm-and-chevrolet-a-new-new-coke/feed/ 2 http://www.devilsadvocategroup.com/death-by-powerpoint/ http://www.devilsadvocategroup.com/death-by-powerpoint/#comments Mon, 24 May 2010 14:33:35 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1223 A New York Times article on the overuse and misuse of PowerPoint by U.S. military leaders in Afghanistan caught our eye because it dramatizes what we've said about how PowerPoint can contribute to bad decisions on corporate strategy. The problems in the military are, of course, more important than those we've described, because the military is dealing in life and death while we're just writing about dollars and cents--albeit lots of dollars and sense. But we'll take lessons wherever we can find them. PowerPoint can lead to oversimplification and lack of analysis. If someone is justifying an acquisition by saying there will be synergies and economies of scale, those ideas may make intuitive sense, and people viewing them as bulletpoints may just nod their heads and move on. If someone is forced to write a memo justifying the ideas, they'll have to lay out the exact synergies they're expecting--who will buy what, when, where and why--and it may become clear that the synergies are imaginary...]]> http://www.devilsadvocategroup.com/death-by-powerpoint/feed/ 1 http://www.devilsadvocategroup.com/citiregroup-growing-by-shrinking/ http://www.devilsadvocategroup.com/citiregroup-growing-by-shrinking/#comments Wed, 07 Apr 2010 00:46:00 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1210 While Citigroup still has plenty of problems ahead of it, we applaud the simplification that is going on there. Our research for "Billion-Dollar Lessons" found that, far too often, companies confuse size with scale. Studies show that if you double in size by doing twice as much of exactly the same thing then you get economies of scale, but that if you double in size by doing something even slightly different then the additional complexity makes you markedly less efficient. Generating additional revenue isn't enough; it has to be the right kind of revenue. While studies haven't looked at businesses of Citigroup's size or complexity, the company has demonstrated rather conclusively that if you grow by doing a whole range of rather different things then the result is unmanageable.]]> http://www.devilsadvocategroup.com/citiregroup-growing-by-shrinking/feed/ 0 http://www.devilsadvocategroup.com/is-redmond-the-new-rochester/ http://www.devilsadvocategroup.com/is-redmond-the-new-rochester/#comments Tue, 09 Mar 2010 06:22:08 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1202 As early as 1990, Bill Gates saw Kodak’s eventual demise coming, because he knew that digital photography would wipe out the profits to be had from conventional photography. That insight demonstrates how smart he is (which we all knew) and also how much easier it is to see others' shortcomings than to see your own. Stories like this one in the New York Times by Dick Brass, a former Microsoft vice president, about Microsoft's lack of innovation have many in the technology world saying openly that Microsoft, based in Redmond, WA, may be taking the long glide toward the ground that Kodak and its headquarters city of Rochester, NY, have been on for two decades now. ]]> http://www.devilsadvocategroup.com/is-redmond-the-new-rochester/feed/ 1 http://www.devilsadvocategroup.com/more-devils-advocates/ http://www.devilsadvocategroup.com/more-devils-advocates/#comments Sun, 07 Mar 2010 00:01:44 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1183 Our friend Carl Lingenfelter passed along the item below about how the California State Teachers' Retirement System has established a devil's advocate system to improve their decisions on how to invest their $131 billion of assets. It seems that the fund made a series of bad choices that left it vulnerable during the Great Recession. The fund hopes that more robust debate will prevent similar problems in the future. We're skeptical that appointing internal devil's advocates will prevent all the problems. [Updated with new reference on 3-8-2009.] ]]> http://www.devilsadvocategroup.com/more-devils-advocates/feed/ 1 http://www.devilsadvocategroup.com/warren-buffett-is-singing-our-tune/ http://www.devilsadvocategroup.com/warren-buffett-is-singing-our-tune/#comments Wed, 03 Mar 2010 05:51:19 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1174 We've often quoted the Warren Buffett line that is the lead in this New York Times article to make the case that Buffett himself makes in his latest letter to shareholders: You can't trust your investment bankers' advice on an acquisition any more than you should ask a barber whether you need a haircut. It's not that investment bankers are stupid. Far from it. It's not that they're venal. Some surely are, but many very much have the best interests of their clients in mind. The problem is the incentives.]]> http://www.devilsadvocategroup.com/warren-buffett-is-singing-our-tune/feed/ 1 http://www.devilsadvocategroup.com/roadkill/ http://www.devilsadvocategroup.com/roadkill/#comments Sat, 27 Feb 2010 21:02:04 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1156 We recently wrote a short article, "Don't be Road Kill on the Innovation Highway," for InnovateNow, a foundation launched by the Chicago Chamber of Commerce to "promote ongoing business innovation and regional economic growth and to transform Chicagoland into a global center of innovation, entrepreneurship and creativity." Here's a "link to the formatted article," or you can read it below. ]]> http://www.devilsadvocategroup.com/roadkill/feed/ 0 http://www.devilsadvocategroup.com/the-fed-no-gerry-levins-in-sight/ http://www.devilsadvocategroup.com/the-fed-no-gerry-levins-in-sight/#comments Mon, 11 Jan 2010 04:59:06 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1141 As much as we applauded former Time-Warner CEO Gerald Levin for owning up to his mistakes in relation to the disastrous merger with AOL, this column in the New York Times describes a situation with the Fed that is far more typical of what happens in the business world. The Fed is lobbying for greater of the financial system to prevent future crises, but isn’t acknowledging that it missed the housing bubble—and miss it the Fed did, as the columnist demonstrates by citing the reassuring statements Fed officials repeatedly made about the housing market. Even worse, the Fed doesn’t seem to be trying to understand why it missed the bubble. Without that knowledge, how can the Fed possibly do a better job next time? ]]> http://www.devilsadvocategroup.com/the-fed-no-gerry-levins-in-sight/feed/ 0 http://www.devilsadvocategroup.com/gerald-levin-apologizes-for-aol-time-warner-merger/ http://www.devilsadvocategroup.com/gerald-levin-apologizes-for-aol-time-warner-merger/#comments Mon, 11 Jan 2010 04:47:20 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1126 FINALLY, SOMEONE ADMITS A MISTAKE Over the years, we’ve been stunned to see how hard it is for executives to recognize and acknowledge mistakes. After all, everyone makes mistakes. The trick is to learn from them so you don’t repeat them, or, better yet, to learn from others’ errors so you never have to make those particular mistakes yourself. Despite the obvious benefits of learning from errors, the denial among executives runs so deep that, to pick a couple of examples from our book: ]]> http://www.devilsadvocategroup.com/gerald-levin-apologizes-for-aol-time-warner-merger/feed/ 2 http://www.devilsadvocategroup.com/ncrs-dvd-play-could-be-a-flop-wsj-com/ http://www.devilsadvocategroup.com/ncrs-dvd-play-could-be-a-flop-wsj-com/#comments Fri, 18 Dec 2009 16:40:21 +0000 Paul Carroll and Chunka Mui http://www.devilsadvocategroup.com/?p=1098 Usually, when we highlight a news item, we have a fair amount to say to amplify what's been written, but this piece in the Wall Street Journal about NCR's misguided decision to buy DVDPlay, a business that dispenses DVDs from kiosks, pretty much covers the waterfront. The acquisition of DVDPlay extends NCR's misjudged adjacency move into DVD kiosks, slightly enhancing its distant second position compared to Redbox, the industry leader. (See NCR announcement here.) Why don’t we like this adjacency strategy? Well, a number of red flags stand out.]]> http://www.devilsadvocategroup.com/ncrs-dvd-play-could-be-a-flop-wsj-com/feed/ 2