All Things

As I did earlier with the Education category, I’ve decided to generally put articles related to the Christian Church and various religions in another space, in this case my blog RealCurrents. That’s where I’ve just posted a discussion of the management issues behind the controversy reportedly flaring up over churches attempting to move to a more “purpose-driven” approach promoted by pastor and author Rick Warren.

This controversy raises an issue which is common to all organizations - the tension between decentralization and centralization, between external results and internal order. This is a central problem in management, similar to how the paradox of free will is a central issue in philosophy. I note, for example, how Intel’s Andy Grove discusses the subject at length in his book High-Output Management.

Anyone interested in management needs to be very much aware of this inevitable tension between mission/projects/results and function/bureaucracy.

Years ago, Apple ran an ad with a bunch of lemmings all following each other off a cliff. After all, why think when it’s so easy to just NOT think? Well, here we go again. This year it seems like most all the major blogging/social networking services are one by one getting blinded in the headlights of MySpace.

As if we really need more of the lowest common denominator! There’s so much opportunity for innovation in this area, yet everyone wants to be the same. I’ve complained previously on my MSN (now Live) Spaces blog about Microsoft in this regard, and now the latest casualty apparently is Facebook.

With only 10 million users after two and a half years of operation, I guess Facebook just feels like a failure next to MySpace. Never mind the fact that they own the campus network space, they would rather throw out that distinctive so they can compete head-on with everybody. Usually these sorts of commoditization strategies don’t end up being as profitable as the competitors expect (the airline industry comes to mind).

Perhaps the Facebook users will again make a big fuss. Maybe management will listen, but chances are, based on the past history of fast-growing tech companies, they won’t. Most keep determinedly going in the wrong bone-headed direction until they go right off the cliff.

Xanga, which I use for my blog AeroGo and perhaps my favorite of the bunch, is likewise feverishly adding multimedia features, to compete not only with MySpace I suppose but also Flickr and YouTube. So far these changes seem mostly positive, but if Xanga can add these features so readily, they will very likely end up as standard on all sites.

Hasn’t anybody (or at least any VCs) noticed that there are a lot of people out there who don’t like MySpace? I mean really, it’s pretty raunchy by and large. It’s as if there was a town full of nice, somewhat distinct neighborhoods, yet all the developers were racing to fill these places with trashy businesses and dumpy apartments.

So why don’t any of these sites carve out a unique identity for themselves? I think the only plausible answer is the dramatic, rapid growth of MySpace. Why have 5 or 10 million users when you can have 100 million? Of course, these users apparently are also spending a lot of time on MySpace and so, presumably, potentially a lot of dollars.

Nevertheless, it seems that money is best made on the net by tightly targeting customers, not with mass marketing, so I suspect sites that are oriented around specific topics, activities and user demographics will ultimately yield a superior return. As I’ve noted before, these social networking sites need to differentiate themselves and find niches where they can thrive, as Facebook has (even if they don’t grasp the value of this).

Let me use Facebook as an example, since it has done the best job of targeting a very large yet tightly-defined niche (high school and college campuses). College students in particular have so many things they have to (or want to) buy, that the marketing/advertising opportunities seem almost endless, both at the local and at the national or branding/name recognition level. Everyone from the local pizza restaurant to students selling used textbooks to Hollywood film studios will want to target their users.

I’m not in school so I don’t use Facebook and don’t know how good a job they’ve done of capitalizing on this opportunity, but the folks developing (and funding) these sites need to remember that traffic often, but not always, equates to sales. Ultimately, it boils down to trust. I suspect that MySpace, as many city centers did, will begin to collapse of its own weight as many head to the “suburbs” of seemingly safer sites like Xanga and others.

The planned growth ideal for urban development might in fact be a useful metaphor for these social networking sites, which may do best if they concentrate on growing at a sustainable pace with a clear demographic or interest group in mind. Users need to come to trust these sites and feel safe in them. Then they will end up spending a lot more time and money there, and for the long run.

I wrote about Ford’s selection of former Boeing Commercial Airplanes President Alan Mulally as its new CEO on my blog AeroGo. As I note there, I don’t agree with William Clay Ford’s assertion that there are many parallels between Boeing’s recent challenges and Ford’s.

In a narrow sense, maybe yes, you can say that Ford needs to renegotiate union and supplier contracts, etc., but really Ford Motor Co. has been its own worst enemy, and is much more a victim of its own ineptitude and lack of decisiveness as any external circumstances. It was only a few years ago that it was the strongest of the Big Three, and now it appears to be the weakest.

If you want to draw parallels, a much better comparison could be made between Ford and Apple Computer than Ford and Boeing. As a long-time Apple user, I can assure you that Apple has long been its own worst enemy. Even when Apple did make outstanding products at intelligent price-points, for years it would suffer severe logistical problems that cut into the potential gains. Even in recent years, I suspect continuing skepticism of Apple’s ability to ramp up production of hot products is one reason folks underestimated its iPod business for so long.

The difference with Apple now is that it finally has a clear, focussed direction for its products and the brand is healthy again. In the same way, Ford needs to make up its mind what kind of car company it is and develop clear differentiators for each of its brands, whichever ones it decides to keep.

It wasn’t too many years ago that William Clay Ford was declaring that Ford was going to be a leader pushing for better fuel economy and lower emissions. Along came a few problems, and apparently that vision was tossed, and now, with gas prices up and highly dependent on truck sales, the failure to follow through on that vision is really hurting them.

Product-driven companies like Apple and Ford must set a course and stick to it long-term, and not constantly adjust to every external up and down, whether in the market for their products or their stock. Even recently, nearly a decade into Apple’s turnaround, analysts were calling Apple’s plans for the Mac unrealistic, that they needed to focus on market share, etc. Of course, the reality of the computer business has long been that significant market share gains are made on the mistakes of one’s competitors, mistakes which are all too common, and which even Microsoft has been making of late.

In other words, stability and staying the course are far too under-rated. On the other hand, there is one crucial difference between Apple and Ford - even when things were their worst, Apple had large cash reserves, something Ford may not be able to count on. But any “quick fix” that damages the Ford brands will probably just end up making things worse.

The sad thing is, William Clay Ford’s “greener” vision for Ford may well have been on the mark, and it’s a shame they didn’t stick to it. Perhaps a return to his vision coupled with Mulally’s demonstrated management ability can turn the company around. As with Apple, there’s probably a lot more life left in the Ford, Lincoln, Volvo and Jaguar brands, at least, if they can set a clear direction and stick to it. For a few years things may not look so good, but a consistent product vision will eventually yield leading products and strongly-differentiated brands.