The Peter Burrows’s BusinessWeek article, How big will the iPhone be? discusses the potential impact that the iPhone may have on Apple. Burrows projects that the iPhone could translate into a $10 billion business for Apple – even in a crowded and competitive market. No one questions Apple’s brand strength and the fact that there is currently a large existing iPod customer base who will be lining up to purchase this phone, but the fact remains that the cell phone industry is crowded and highly competitive.
Two initial questions that popped into my mind were: (1) wouldn’t it have made more sense to offer this phone as an undocked phone – one that anyone can buy and add it to their carrier of choice. That way you don’t limit your potential customer base to those willing to go with the AT&T network. (2) Given the need for bandwidth for some of the phones services, wouldn’t it make more sense to focus the initial push for this phone in Asia and Western Europe? These two regions currently employ 3G networks, whereas in the U.S. 3G networks are not nearly as widespread.
While the early months of the launch will most likely contain some bumps and bruises, overall it will be very successful. But, whether the iPhone dominates the market will be determined by, in part, how successful this product is with corporate users. Currently, it is suggested that the iPhone will not support Outlook very cleanly out of the box. This will negatively impact the iPhone’s numbers – as potential buyers stick with their Blackberry’s and other smart phones due to the lack of Outlook support. In the end, Apple will go from having no presence in the cell phone market to being a major player in this space virtually over night.
Emily Thornton’s cover story, Roads to Riches, in the May 7th issue of BusinessWeek details the recent trend of State governments selling public assets – toll roads, parking garages, bridges and airports – to financial institutions and other private investors. The governmental bodies that have done this so far, or who are considering, often point to their revenue shortfalls and increasing budget deficits as justification for supporting such moves.
Thornton points out that a number of transactions have been completed over the last few years – the Chicago Skyway , Pocahontas Parkway (Virginia), the Indiana Toll Road and Chicago Downtown Parking System – while others are currently in discussions.
In the short-term this cash influx can greatly benefit the governmental entity as they can eliminate debt and improve social services. The potential long-term issues may very well outweigh the short-term benefits. While a private entity could more easily raise prices in order to pay for upgrades, without the fear of committing “political suicide,” it could effectively price out lower income individuals from being able to take advantage of once publicly owned properties.
While it is fairly obvious to see the immediate benefits to the states and the private investors, the long-term effects of these transactions will not be truly felt for years to come. I would hope that our state governments would proceed cautiously and not recklessly chase the dollars that are in front of their faces. I can’t help but wonder what will happen when the other shoe falls.
I read an article on PC World about the rumored layoffs by IBM – the rumors are reportedly bogus – and I began to reflect on the Douglas Mattern article entitled, CEO Pay is Outrageous and It’s Undemocratic. In particular, the following quote really stuck with me.
Business Week reports that the disparity between the ‘shop floor and the executive suite’ is at an all-time high. In 1980, CEOs made 42 times the average blue-collar worker. By 1990, this disparity rose to 85 times, and by the year 2000 the disparity between worker and CEO climbed to 531 times as much.
This trend is particularly bothersome because while it may motivate those employees who are striving to become CEOs, it mostly de-motivates blue collar and other lower paid employees – those that are most susceptible to layoffs. While the CEOs role is critical and is a very stressful position, in general they are being disproportionately compensated – often with little or no direct ties to the performance of the company. For example, Bob Nardelli when he accepted the position at Home Depot refused to have his compensation tied to the stock price of the organization. Over his six year tenure, he made many moves to make the organization “lean and mean” which both drained morale at this once proud organization and had negative impacts on customer service.
While some organizations are cracking down on CEO pay packages, most still provide lucrative “golden parachutes” to CEOs. The CEO severance package, which are often for multiple millions of dollars, include additional benefits on top of the enormous compensation packages that they received during their tenure with the company. What’s maddening is that these packages are paid out after the organization decides that, based on a lack of performance; they need to replace the CEO. Employees will see the total pay packages of the CEO and also witness hundreds, if not thousands, of their fellow employees get laid off due to budget cuts and restructuring and it is not hard to understand why they would lack motivation.
So while the IBM story may not be accurate, it is nevertheless tough to watch as employees get laid off due to ineffective, grossly overpaid executives.
Filed under Bob Nardelli, CEO, CEO Pay, CEO Salary, Douglas mattern, Executive Excess, Executive Pay, Golden parachute, Home Depot, IBM, PC World
Most of the vexing challenges leaders face – improperly executed strategy, lack of organizational agility, disengaged employees, and so on – stem from broken or poorly crafted commitments. Executives can overcome some of their thorniest problems in the short term and foster productive, reliable workforces for the long term by practicing what we call ‘promise-based management’: cultivating and coordinating commitments in a systematic way.
I came across this article written by Sull and Spinosa, Promise-Based Management: The Essence of Execution, in the April edition of the HBR and was fascinated by its title. As I read the article I began to reflect on my own personal experiences with the organizations that I have worked for, and with my own staff. I agree that one of the quickest ways to take the wind out of a person’s sails is to break a commitment – especially one that was made publicly. Most employees realize that in business, as in life, that change is one of the few constants. With that said, it is hard to justify breaking a promise that was made without adequately considering the impact. I am suggesting that there are those around us who are “serial committers” – they always say yes and rarely say no, even when they should. These individuals become so engulfed by the shear number of commitments that they have made that it becomes impossible for them to execute on any of them, at least not effectively.
I found Sull and Spinosa’s five characteristics of good promises particularly interesting. They define good promises as those that individuals are committed to keeping. And point out that they are:
- Public – promises that are made, monitored, and completed in public are more binding.
- Active – negotiating a commitment should be an active, collaborative process.
- Voluntary – effective promises are not coerced.
- Explicit – requests must be clear from the start.
- Mission based – explanation of why the commitment matters.
In conclusion, it is time for us to retrain our staff, colleagues and senior executives that it is completely appropriate – if not valuable to the organization – to say no. Or looking at it a different way, to put the commitment on hold until there is ample time to evaluate the entirety of what is being requested, and its impact on the organization. It would provide us all with the requisite time to evaluate what the impact would be if the promise is not acted upon.
About a month ago – after a Federal court issued an injunction which prevented Vonage from signing up new customers during their appeals process – there were those in the media who were predicting the impending death of Vonage. Well now after an Appeals court granted Vonage’s grant for an extended stay, it appears that they are not dead yet.
First let me point out that every individual or entity has the right to protect his or her IP. Now let’s assume for the sake of argument that Verizon is accurate in their claims. I find it hard to be sympathetic for a company that is (A) not able to successfully market the technology that they develop, (B) not actually interested in marketing a potentially less expensive technology to its consumers because it cannibalizes an existing cash cow, or (C) its organization is so terribly slow to react to market forces that they could not successfully introduce the technology that they developed before a competitor beat them to the punch. It will be interesting to see how this appeal ultimately plays out.
Late last week, I decided to upgrade two of my PCs from Ubuntu’s v6.10 (Edgy Eft) to the beta release of v7.04 aka Fiesty Fawn. Now while I have mentioned before that I have “tech-tendencies” but not nearly as tech savvy as many of you, I found the upgrade process to be extremely easy. Better yet, as the OS was doing its thing, I was able to continue surfing the internet and do other work. The entire upgrade process took about 40 minutes and to my surprise – given my experiences with other operating systems – everything was working as expected. And now with almost a week under my belt, I have not experienced any issues with this beta release. So far, I have to say that I am very impressed. I like having the latest and greatest release, but normally in this situation you hope for the best, but expect the worse. And so far (knock, knock, knock) all is great!