Microsoft employees in 1978 at company headquarters in Albuquerque, New Mexico.

• Microsoft, where a long-time, hard-charging number two has taken the reins from the man who founded the firm in 1975 and led it from a small handful of people to one of the world’s largest and most important companies.

• Nokia, a firm whose ascendancy to a dominant position globally was relatively recent.  In the last three years they have been eclipsed in industry leadership and market capitalization, and in the consumer imagination, by two firms who entered the industry within the last couple of years, Apple (June 2007) and Google (September 2008)—and one of them doesn’t even make phones.

The company is now led by a long-serving senior executive who, while he preaches change, says following a brutal analyst meeting, We are not getting the benefit of the doubt.  Adding, We need to change that.

To this, a long-time friend and Nokia alum who worked closely with many of the company’s senior executives,  commented,

That would be your challenge!  No one owes Nokia “benefit of the doubt” – you earn your way with cool, with “it” products at the right price, and that alone sustains a company.  No amount of marketing or PR will save a substandard product.

• General Motors, a firm that once personified American industry, as shown in this ad in happier days . . .

  
  
  

  . . . 12 months ago underwent one of the largest Federal intrusions ever in private industry and is now led by Ed Whitacre, an industry outsider who famously proclaimed, “I don’t know anything about cars” the day after he was appointed.  (Lesson 1: Lower expectations.)  Whitacre, a former telecom exec, has words appropriate for a firm of any size,

I want to make sure people understand that the responsibility for this company to be successful is not just with the C.E.O.  It’s them.

My style is really just to say, “Let’s get going, let’s do something, let’s move, and let’s not be constrained by something that has happened in the past.  Nobody is going to be fired for trying something new around here.

Some of the world’s most storied companies have faced major challenges that knocked them from their perch atop their industry.  Some turned themselves around after many counted them out, only to return as an industry leader.  Disney and IBM come to mind.  Others are works in progress, including Sony, Kodak, Ford, and Boeing.  And there are recent stars that are struggling, some with new leadership, such as Yahoo!, and others with largely the same management team, such as eBay.

Whether one leads a large company or a small one, it’s fascinating and instructive to watch all these companies.  The trick, of course, is knowing whether one is observing success or failure in the making.

…

Note: I’ve set set aside firms in the financial and health care industries, the shape and future of which will be greatly affected by Federal legislative and regulatory changes, and firms in any industry that can be easily digitized (e.g., newspapers, magazines, recorded music), which are all being radically transformed by the web.

Regarding the latter, this quote, attributed to Warren Buffet, comes to mind: When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact.

(Note: The private sector is replete with examples of large, successful, entrenched organizations that thought themselves immune.  Nortel, Polaroid, DEC, and Data General (below), are a few of many.)

Nonetheless, there are several initiatives underway, some of which have the potential to make an important difference.  One of them concerns public access to Federally-funded research and began earlier this week with the Federal Office of Science and Technology Policy’s announcement of an online forum on this issue.  The fact that the question is being asked at all, and that the discussion is public and online, is in and of itself progress.

However, the topics to be discussed—implementation (12/10 – 20), features and technology (12/21 – 31), and management (1/1 – 7)—suggest that the operating assumption may be that any new effort will require rules, infrastructure, and headcount.

My comment, as a resource-constrained entrepreneur (and taxed taxpayer), advocates a different approach:

While raising this issue is progress, it will only matter if and when something is implemented.  Rather than cautious small measures made after lengthy deliberation and implemented over a period of years, why not take a revolutionary, innovative approach and do something simply, cheaply now.

Starting January 1:

- Grant applications are made public upon submission.
- Progress and results reports are made public upon submission.
- All research that includes Federal funding of any sort must disclose the amount of the funding and the agency giving the grant when the research is published or presented in any medium.

This requires no cost and only a few minutes of time. Use existing documents, which means the cost of creation is zero, and existing publishing infrastructure, such as scribd.com, which is free to all and already used widely by the SEC and other Federal organizations.  (My document stream on scribd, most of which concerns historic preservation.)

The excellent search (full-text, author, keywords, tags) will take care of discovery.  Free tools enable embedding documents in web pages and blog posts.

Implementation is as simple as requiring all grant requests going forward to include a standard compliance line that places the burden on those submitting grant requests.  And for those individuals, their only cost would be uploading already-created documents, which takes less than 5 min./document.

Finally, if instituting this in a few days seems unfathomable, make it January 1, 2011.  Either way, let’s make it incredibly simple and straightforward to understand, very cheap/free to implement, and comprehensive in scope.

It will be interesting to see if and when progress is made.  Meaningful change is very hard in any  bureaucracy.

There is one area in which states do face a direct and compelling challenge that often motivates them to adopt new technology: Warfare.

The management team at Data General, a company founded in 1968 by former DEC execs, would have been advised to pay closer attention to the message in their own commercial.  The company, which rode the minicomputer boom up and down as technology and competition evolved, was acquired by EMC (founded in 1979).  EMC promptly closed down or sold off everything except Data General’s storage business.

Innolux was founded six years ago by Terry Gou, who also founded and is chairman of Hon Hai Precision Industry, the world’s largest ( by revenue) contract manufacturing firm.   Among their customers are Sony, Apple, Motorola, and Nokia.   (This excellent August 2007 Wall Street Journal article profiles Gou and his company.)

How did Hon Hai get it’s start?  By “making knobs for black-and-white TV sets.”

One model of Nokian boots offered today.

One of those customers, Nokia, got it’s start in wood pulp in 1865, and later made a name for itself in rubber boots and tires.  It wasn’t until the 1990s that Nokia began to focus on telecom.  In 1990  the rubber boots business was spun out as Nokian.  Two years later Nokia released their first GSM phone.

One of the biggest challenges facing any leader is determining the company’s direction and allocating the resources across many different opportunities.

In the case of these two companies, both multi-billion dollar global firms, the earlier decisions—to give up tires and knobs and focus on telecom and electronics—seem obvious.  That’s seldom the case when you’re in the midst of making those decisions.

Today, faced with a rapidly-changing landscape, the management team at Nokia has reorganized (more than once), acquired several companies, and launched new services in an effort to better compete in this new world.  Whether Nokia can remake itself this time, as they’ve done many times over their long history, is far from clear.

Nonetheless, the lead editorial in this morning’s Boston Globe is a good example of those in an industry failing to understand impact of technology on the very function they perform and need they fulfill.

While much has been made of the “business model” of print newspapers and the fact that online ad rates are insufficient to support the same news gathering infrastructure as newspapers employ today, that line of reasoning assumes that the only difference that matters is simply a difference in delivery mechanism, from ink on paper on my front porch every morning, to online on my laptop anytime anywhere.

Instead, the ubiquity of web access and its broad adoption throughout society combined with the growing number of free, easy-to-use tools for collaboration and information sharing,  means that the fundamental way in which information is gathered, analyzed, and distributed is changing.

Gone are the days in which full-time employees (reporters) were the only ones who could spend the time needed to deeply research a topic and the only ones who had access to the needed people and documents.

And it’s those days that the Globe laments this morning when it describes the three examples of journalistic perseverance and fairness to be recognized tonight with Taylor Family Awards for Fairness in Newspapers administered by the Nieman Foundation at Harvard.

Read the editorial and the descriptions of these and other honorees and one immediately thinks of the way in which the web puts this information in the hands of so many and gives them the tools to analyze, collaborate, comment, and rate the analysis and discussion of anyone who wishes to participate.

Consider the most celebrated example of journalistic success from the past fifty years, the coverage of Watergate and the Nixon administration’s attempted cover up, and one quickly imagines that if this were to occur today that more people would come forward with bits and pieces, and others would help knit them together more quickly than any two men, however talented and persistent, could accomplish on their own.  (Would Watergate have given rise to the first wiki?)

The awards are, in fact, rich with irony, including . . .

• They were created by former Globe publisher Bill Taylor, whose family owned the Globe for many years (before selling it to the New York Times Company) and under whose ownership lifetime employment was introduced.  Today, 435 employees at the Globe have been promised lifetime employment.

• The awards are administered by the Nieman Foundation, which was funded originally by Agnes Wahl Nieman’s gift of $1 million to Harvard in 1937.  As the Foundation’s site states,

Her directive to ‘… promote and elevate the standards of journalism and educate persons deemed especially qualified for journalism‘ ultimately gave virtue to the concept of continuing education for working journalists.” [emphasis added]

With the web, the tools to gather and freely disseminate information broadly are available to all, regardless of education or station in life.

• The source of money was her enterprising husband, who is also described on the Foundation’s site:
  

  The Milwaukee Sentinel Building (1911)

Lucius had a hardscrabble youth.  He lost both parents as a boy and was raised by his grandparents. Attracted to journalism at an early age, he started work as a printer’s devil when he was just 12 and rose quickly through the ranks to become managing editor of The Milwaukee Sentinel only six year later.  By 25, he owned his own paper, The Milwaukee Journal, which he ran for half a century.

Lucius’s lifelong commitment to telling the news fully and truthfully won the respect and loyalty of his readership and eventually, the Pulitzer Prize for the Journal in 1919.

Reading this one can’t help but think of the opportunities that the Web has ushered forth, including for men and women as young (and younger than) 12 years of age.

If Lucius were alive today, do you think he would have sought a job in the press room of a newspaper?  (He would have been barred from such employment based on his age alone, which is yet another barrier that doesn’t exist on the web.)    Or that, at the age of 25, he would have invested in a traditional print newspaper?

The Boston Globe in somewhat happier times.

This confuses many things, including what is created (a news story) with the means and form of delivery (ink on paper tossed on to my porch every morning).

A recent post by Doc Searls discussed different technologies and models that may be developed to support new payment and subscriber models.

My comment, which appears below the post, follows:

Interesting discussion, as always.

Observations from someone who grew up in a two newspaper (a.m. and p.m.) household, has subscribed to the main city paper everywhere he’s lived, and who can’t imagine not opening two papers (the WSJ and now the Globe) every morning:

- It’s helpful to understand whether a comment or conversation is about what we would like to have happen or what we think will likely emerge in the market and be sustained over the intermediate- to long-term.

- Various technology-driven approaches that require a modification of consumer behavior will be suitable for the (relatively) small number of people who who choose to make the change.  Some mass media properties will try them; others won’t.  Whether they survive at all will be based on that competition and the resulting business models that each is able to establish.  There is no reason to believe that all newspapers (really, traditional print mass media organizations) will choose the same model.  And of course some niche print and online efforts will be supported by subscribers.

- Little of the discussion around the fate of print mass media has reflected an understanding of the various value-creating components and the way in which they serve different audiences.

In the case of newspapers, for example, there is less value than ever in the traditional physical, branded collection of journalists, editors, and advertisers.

When a plane lands in the Hudson and you want an an up-close view of what happened, you may find it in someone’s phone camera images posted on CNN.  For a follow-up report on bird strikes and the response of manufacturers, airlines, and the FAA, the authoritative source may very well be someone who writes exclusively about the aviation industry for a niche site/pub.  There is no value added by having, in this case, a Boston Globe reporter trying to cover all of that.  They may, however, get the first interview with Boston-based passengers when they land at Logan, and if they do, the audience for that piece may be much larger than the audience for the Globe.

Aside from the editorial page, for online readers there is less of a connection between hard news sources and a masthead than ever before.  (The NYT, WSJ, and a few other traditional print newspapers are probably also exceptions.)

- Online, one wants to have a curated (by one editor or a crowd or a search utility) list of the news that’s of interest and an easy way to follow particular stories from the “best” source, which may or may not be from the source that broke the story.

The ability to do that online with near-zero costs for the reader exposes the fact that the traditional print media business model has a cost structure that people no longer need to pay for.  And with alternatives that many readers see as hard to distinguish, they see no reason to pay the premium.

- Online advertising is a surprisingly elegant solution for paying for content creation, despite the distaste of some that such a grubby commercial venture as selling things should appear next to articles.  After all, for many media companies that are publicly-held, the goal is to deliver target readers to advertisers.  Compelling content is the way that’s done.  Online advertising provides tremendous precision around this, with the ability to connect reader with advertiser in ways that heretofore weren’t possible

The fact that advertising rates are much lower online than in print is a function of competition among online content creators/publishers.

Print rates will decrease further as the decision makers at traditional print buyers (advertisers and their agencies) continue to be replaced with younger individuals who have no ties (mentally, emotionally, or socially) to the traditional print media advertising infrastructure.

- We will have fewer full-time traditional journalists in the future, just as we have fewer TV repairmen than we used to have.

- And the role of technology in the evolution of the mass print media?  As opposed to innovation on the payment side, broad, lasting impact will likely be in continuing to drive down the cost and increase the quality of the tools journalists (however defined) use to gather and publish news, the ones readers use to sift/sort/track and comment/share/rate, and the ones advertisers and publishers use to match message/offer with individual.

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