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Is “What’s Good for IBM, Good for America”?

Sunday, August 14th, 2011

In 1953, General Motors’ president Charles Wilson said “what was good for the country was good for General Motors and vice versa.” As often the case, the somewhat misquoted version, “What’s good for General Motors is good for America” is the phrase that became part of corporate (or perhaps anti-corporate) mythology. One could debate then, as it certainly was during the 2008 automotive bail-out hearings, whether or not Wilson was correct.

The night of August 4, however, provided something of a déjà vu moment. That night, I had the privilege of attending IBM CEO Sam Palmisano’s Centennial Lecture, a reflection on some of the primary lessons that IBM has learned over its first 100 years.

The overarching lesson was that corporations are expendable—success in one era does not ensure success in another. IBM’s ability to maintain its success (and right itself during the period in which not only its success, but its future, was imperiled) has taught him three primary lessons:

Lessons for IBM

  1. The importance of the “and” in R and D. First, fundamental research is critical and cannot be cut during tough economic times since, “if you fall behind, it becomes very tough to catch up.” Research, however, is only the starting point. It must be complemented with development and the “conversion of discovery into profits.” Moreover, the formulas for successful “R” and “D” are both continually changing. Today, for example, collaboration is becoming as critical as proprietary research. You must, therefore, continually “innovate how you innovate.”
  2. An organization must survive not only its failures, but its successes. Companies must get beyond an emotional attachment to what made them successful in the past. Business models and organizational models, as well as products, must be continually rethought and adapted to the requirements of a new era.
  3. An organization must learn to outlive a charismatic leader. It must distinguish between charisma and leadership; as well as focus on and heavily invest in both helping its employees learn and on developing its future leaders.

In sum, while an organization must remain committed to a core set of beliefs, it must not confuse business and organizational models with beliefs. To be sustainable, an organization must continually rethink and adapt its objectives, its models and its approaches. In today’s world, this evolution must depend as much on collaboration as on competition:

“The Wild West of competition needs to be complemented with far more collaboration across old boundaries. Across academic disciplines… and industries… and nations…and even between competitors.”

Lessons for the Country?

Palmisano’s lessons were clearly drawn from IBM’s own past, and are intended to guide its own future. Although he and IBM would certainly deny any intent to shape today’s political debate, he did acknowledge that “many enterprises—indeed, many countries”—are struggling with “an inability to get beyond an emotional attachment to the past…to what [really] made you successful.”

It was hard for me and a friend, with whom I continually exchanged glances and smiles as he talked, not to view these lessons in the context of our countries’ current problems:

  • The need to look beyond current problems to invest, not only in R+D, but also in infrastructure and people, for the long-term;
  • The need to look beyond models and practices that created past success, and adapt them to continually changing circumstances;
  • The need to move beyond the personalities of past and current leaders and to invest in educating and developing new leaders; and especially the need to
  • Move beyond fight-to-the-death competition and to cooperate in solving common problems.

Okay, perhaps I am reading WAY too much into what Palmisano actually said. But it doesn’t stop me from fully buying into what I thought I heard.

Posted in Business Trends, Economic and Political Forces, IBM, Innovation/Entrepeneur, IT Industry Trends, Political Forces, Societal Forces | No Responses »
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Cisco’s Commitment to Smart+Connected Communities: Transforming Cisco from an Internet Plumber into a Solutions Architect

Sunday, May 29th, 2011

This is a summary of the report on “Cisco’s Commitment to Smart+Connected Communities”. For information on how to obtain the entire report, email the author, Tom Kucharvy, at TomK@Beyond-IT-Inc.com

Cisco is on a self-described mission to transform itself from what CEO John Chambers called a networking “plumber” into a trusted architectural adviser and provider of “platforms for innovation”. This requires a fundamental transformation in the company’s value-add, its sales model, the types of services it provides and, perhaps most challenging, in the type of partners the company recruits and in the ways it engages with them.

The company, as discussed in a series of my blogs beginning in May 2010, effectively began this journey by developing a solutions-based approach to promoting its video and other collaboration technologies, virtualization, and borderless networks—all by leveraging its core strength around the network as the underlying platform. It has since extended way beyond horizontal solutions by unveiling initiatives around a growing number of solutions-based “market adjacencies.” These adjacencies, which include healthcare, education, energy, transportation, sports, entertainment and public safety and security, are also being combined into more comprehensive and ambitious efforts such as its Smart+Connected Communities (S+CC) initiative, in which it provides the intelligent, integrated network solutions across multiple adjacencies to help cities drive economic, social and environmental sustainability and efficiently deliver 21st century services.

These efforts will serve as critical proof points of whether the company can indeed extend beyond the maturing and increasingly competitive market for switches and routers to become a globally recognized provider of solutions that improve businesses, societies and Cisco’s own bottom line.

Building the S+CC Value Proposition

Although Cisco has been providing tools for addressing specific, narrowly-defined industry initiatives for the last several years, its effort to pull all of these and other complementary point solutions into a comprehensive network-based, city-wide architectures began in 2008, when real estate developer Gale International selected Cisco as its networking partner in developing the intelligent infrastructure for a totally new city, the Songdo International Business District, which Gale was developing in South Korea.

New Songdo is the most expensive privately financed real estate project in history. It will be a green, LEED-certified community, designed from the ground up to emit one- third of the greenhouse gases of a typical city its size. It will also be one of the world’s first smart cities, with Internet-monitored and controlled traffic, water, power, transportation and public safety. Every wall socket and appliance will be connected to the IP network and every home and office will be able to monitor and orchestrate its own heat, air conditioning, lighting, appliances and energy usage. Each will also have its own Cisco TelePresence videoconferencing system—which Cisco claims will be the “killer portal”—though which all types of urban services (healthcare, education, safety, shopping and so forth) can be accessed.

As ambitious as New Songdo may sound, Gale and Cisco view it only as a starting point. Given the rapid growth in Asian urbanization, the duo plan to use New Songdo as a template from which they will build more than 20 new “instant cities” across Asia. Cisco will also apply the same platform to helping cities of all ages refresh their current infrastructures and enhance and automate the delivery of each individual service (from distance learning and health monitoring through energy management and security services) for which they have a need.

Although Cisco already has many of the infrastructure capabilities required for a platform on which to run and from which to deliver this broad range of services, its history as a box-pusher and plumber has hardly prepared it—much less give it the credibility—to effectively evangelize the vision of a world of vertical services, much less that of the architecture of the city of the future.

It began developing these capabilities gradually beginning with discrete initiatives, as around its Telepresence system and suite of collaboration tools, and then extended these efforts into discrete verticals, such as education and healthcare. As I discussed in a series of blogs in mid-2010 it began this process by:

  • Hiring and training salespeople and consultants steeped in these areas and created a five-stage, services-based process for guiding customers through the entire process, from solution ideation through implementation; and
  • Created a three-stage, service-led solutions incubation process that used its Internet Business Services Group (IBSG) and Advanced Services (AS) organizations to incubate new markets and create lighthouse accounts for promoting its solutions.

It promotes these solutions in its own demonstration centers and highlights them in high-profile venues such as the 2010 Shanghai World Expo. It even created its own virtual, nonprofit S+CC think tank, the Smart+Connected Communities Institute, to spur joint research and knowledge sharing, foster best practices, explore governance models, create training and education programs and eventually, create certification programs around new models of public-private partnership for achieving economic, environmental and social sustainability.

The Platform Ecosystem

But while Cisco recognizes the need to establish itself as a thought leader and to lead the recruitment, design and implementation phases of early accounts, Cisco is, first and foremost, a partner-centric company. Its goal is to package its learnings from initial lighthouse accounts, train and certify partners to use them and then work with these partners to scale new businesses (see my blog on Cisco’s Value-Added Services Partnering strategy for more details).

Cisco’s first step in creating this partner ecosystem was to create an open, standards-based platform. Its City Cloud Platform provides the network infrastructure, complete with a set of underlying horizontal collaboration and Telepresence services and open APIs on which partners can write and deliver their specialized, vertical applications and services. Its initial recruitment efforts are focused primarily on two broad classes of partners:

  • Technology partners, including industry-specific ISVs and system/software providers and providers of complementary horizontal tools such as analytics; and
  • Strategy, market development and consulting partners, primarily SIs with particularly strong positions in specific geographies and market niches.

Given the complexity and large number and range of partners required to design, develop and deliver managed services to cities, Cisco will rely even more heavily on partners for S+CC than it does in its other markets. It will, itself, focus primarily on the communications and collaboration infrastructures required to run these communities. This combined with the fact that Cisco does not plan to build vertical software or create large consulting or managed services businesses, will help it minimize conflicts within these inherently complex S+CC ecosystems.

Cisco is certainly making big investments and incurring big risks in its efforts to jumpstart and establish itself as a thought leader around its broad range of Smart+Connected Communities initiatives. But while its risks are very real, they will, in all likelihood, be relatively small. After all, even if Cisco’s “instant city” vision proves to be a bust, many of its component initiatives, as around telepresence, connected maintenance, energy management, clinical collaboration, distance learning and video surveillance, are already coming to fruition and have the potential of emerging into large, sustainable markets.

Posted in Cisco, Corporate Social Responsibility, Innovation/Entrepeneur, Smart Infrastructure | 1 Response »
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GE’s Ecomagination: From Business Commitment to Business Philosophy and Social Contract

Sunday, April 17th, 2011

Five years ago, when General Electric first launched its ecomagination program, many, including some within the company, saw it primarily as a marketing and PR effort. As discussed in my April 3rd post, the company has long since proven that it was much more than a marketing program. It has now become a fundamental part of its business. And, judging from its commitments to extending the program, ecomagination is on the path to being core to GE’s business.

In fact, ecomagination appears to be more than a central part of GE’s business. Ecomagination is expanding the company’s view of and approach to partnering and is  beginning to become integral to the way GE views its business and even to its contract with society.

The Growing Ecomagination Partner Ecosystem

This, however, is not to suggest that GE believes that it can field all the technology required for its ecomagination solutions. As I discuss in greater depth in a recent report I wrote on GE’s work in building an ecosystem around its Smart Grid program, GE’s divisions are working more closely with each other to facilitate the development of and to support standards that facilitate interoperability across multiple industries (energy, aircraft, healthcare, etc.) as well as to leverage technologies and processes developed in one, to support others.

This being said, each division is also building partner ecosystems around their own ecomagination offerings—ecosystems that consist of combinations of customers, governments, academia and all types of large and small businesses. The company is also forging relationships with other global innovation leaders, exemplified by partnerships with:

  • Honda, to bring the smart grid to aerospace;
  • Better Place, with which it shares a vision to accelerate the global deployment of electric vehicles;
  • Masco, to help builders design and build more energy-efficient homes that use ecomagination home technologies,
  • Cities, including Portland, Oregon and Orlando, Florida to help them meet sustainability goals while simultaneously creating jobs; and with
  • Leading research universities, like Columbia, to realize the next generation of clean energy innovation.

And, where the partners do not yet exist, GE is helping to create them. The company’s ecomagination Challenge is an open call for breakthrough ideas to create a cleaner, more efficient and economically viable grid and to accelerate the adoption of smart grid technologies that leverage GE infrastructure. Like IBM’s Global Entrepreneur Initiative, it provides entrepreneurs with access to GE technical and commercial experts, introductions to VCs and other partners, and opportunities for ongoing technical and go-to-market relationships. The Challenge came with a pledge of $200 million (of which GE funded about half, with the other half coming from its VC partners), to be invested in promising start-ups. The winners, who were announced in December 2010, include:

  • ElectricRoute, which created a communications gateway point for electric transmission and distribution systems;
  • WinFlex, which produces rotors for wind turbines from light, flexible and inexpensive composite materials; and
  • Capstone Metering, which applies remote communications technology to water meters.

GE recently extended the ecomagination Challenge with call for solutions for home energy creation, management and use.

Ecomagination as Integrating Umbrella

Ecomagination serves as both an inspiration to and obligation of GE’s businesses. Led by Jeff Immelt’s conviction that investment in ecomagination will be good for all of GE’s stakeholders, the ecomagination goals for R&D spend, revenue growth and environmental responsibility (energy efficiency and greenhouse gas reduction) ensure that all the company’s businesses contribute. Ecomagination provides corporate leadership, not only by providing the structure for the product approval process, but also by providing continuous feedback on best practices, environmental trends, and the continual monitoring of claims to ensure GE leadership.

Ecomagination also serves as a central coordinating group for key stakeholder outreach, with executive-level, strategic customer engagements; employee engagement; and collaboration with NGOs, governments and other corporations. Furthermore, ecomagination.com raises topical and sometimes controversial issues, and invites the public to participate in the conversation.

This year, ecomagination is expanding its role in driving cross-business initiatives. GE’s heritage with electric vehicles dates back nearly 100 years to Charles Steinmetz and is entrenched in many GE businesses. GE Capital’s Fleet Services is a world leading leasing company. GE’s Licensing & Trading works with automotive manufacturers to improve fuel efficiency. And of course, GE Energy designs and manufacturers electrical equipment from the WattStation EV charger, through all of its local distribution equipment, to the generating technology itself. The company is aggressively endorsing electric vehicles (EVs) through its normal channels, and especially through its commitment to put 25,000 EVs on the road by 2015, both in its own fleet and in those of key customers. The ecomagination team is leading the company’s coordination of these activities.

Given all this, there can be little doubt that ecomagination is far more than an advertising program. It has become a fundamental precept of General Electric’s business philosophy and its social contract. Nowhere is this more evident than in the company’s Digital Energy group’s Smart Grid program (which I discuss in more depth in my aforementioned report).

Posted in Corporate Social Responsibility, Innovation/Entrepeneur, Smart Infrastructure | No Responses »
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Elementary, My Dear Watson?

Sunday, February 20th, 2011

Don’t get me wrong. There was absolutely nothing elementary in IBM’s phenomenal work on Watson. The public debut of the machine (actually the real “magic” was in the software, rather than the hardware), was a triumph in a world that had been claiming, as far back as the 1980s, that “artificial intelligence” was just around the corner.

Still, there is indeed something about Watson that is clearly elementary: something that should give us great hope for the future—both Watson’s and ours.

The “Jeopardy Challenge” , in which IBM’s “Watson” computer handily defeated the two highest winning players in Jeopardy history, was only the latest in a series of Grand Challenges, in which IBM pushed the envelope of computer science to perform tasks that were previously considered beyond the realm of computers—the use of IBM’s Deep Blue in beating the world chess champion, Blue Gene’s role in decoding the human genome and even IBM’s role in enabling the U.S. the land a man on the moon.

Watson, however, went an order of magnitude beyond these previous triumphs of computer power. While the computer’s encyclopedic database and computational power certainly enabled its success, these capabilities were already available on off-the-shelf IBM hardware (2,800 cores and 15 TB of memory in 90 of its Power 750 servers and 20 TB of disk storage linked in a cluster).

Its real accomplishment was in its ability to interpret not just natural language, but the types of puns, metaphors and idioms that have come to characterize Jeopardy. This was enabled by a combination of off-the-shelf hardware and especially the secret sauce embedded in the Jeopardy-specific algorithms over which IBM researchers wrote, tested and tweaked over the last three years. And don’t forget the confidence rating and wagering algorithms which, while resulting in numbers that may have sounded strange to humans, were based on calculates of the odds for all types of contingencies.

Will the Real Watson Please Stand Up

Watson was certainly not perfect in its victory. In the first night’s contest, Watson modestly bested the score of one of its human competitors, and only tied that of the other. Night two, in the first round of Double Jeopardy, things got downright scary, with Watson being the first to buzz for, and correctly answer 24 of the 30 total questions. Watching the frustration of the helpless humans, one could be forgiven for thinking of 2001: A Space Odyssey’s HAL.

Then, with its blunder on its first round Final Jeopardy (Did Toronto recently secede from Canada and join the U.S.?) and its “merely human-level” performance (although it did reach a number of correct answers, but not in time to beat the other contestants) in round two, I got really scared. I began asking myself whether Watson consciously “backed off”, avoiding running up the score, either out of empathy for its flailing competitors, or out of fear that a machine that so dominated humans would be feared and shunned by society. While Watson did end up winning the three-night competition, the ultimate outcome wasn’t really determined until the last Daily Double, and the wager (that ensured it could not loose) that it made on the last Final Jeopardy question.

Why did I find this so frightening? Because I, who have been in the IT industry for more than 30 years, actually began to attribute human feelings to a hunk of silicon!

It is Indeed, Elementary

But I digress. As I discussed above, there was absolutely nothing in IBM or Watson’s Jeopardy performance that was “elementary.” It was, by any account, a stellar achievement.

So, what was so elementary about Watson’s triumph? The comparison of its success in winning a television game show, to:

  • The enormous challenges that civilization faces (and, not coincidentally, that IBM is attempting to address with its Smarter Planet initiatives); and
  • The contributions that Watson technology and learnings have the potential of making to addressing these challenges.

First, let’s recognize—Watson is a room size machine, residing in a specially designed and extensively cooled data center and that even its off-the-shelf components (without even accounting for the cost of developing the algorithms that were so fundamental to its success) cost hundreds of thousands of dollars. But, as Computer Intelligence guru Ray Kurzweil explained in his February 17 Wall Street Journal editorial, at the current rate of computer price-performance advances, Watson’s power is likely to fit within single server in about seven years and within a PC in a decade.

Just as importantly, a “real-life” system would not have to contain the sum total of world knowledge. These systems will be:

  • Tailored to the needs of a specific discipline (such as medicine or finance) or the needs of a specific company;
  • Will have access to the Internet, third-party search tools and external databases, rather than having to operate as a self-contained unit; and
  • Will not be required to devise answers that meet its minimum confidence levels within the three seconds that are required for Jeopardy.

Watson-like capabilities, will, in other words, be available to the public (or at least some segments of the public) within the next couple years. Meanwhile, IBM has already partnered with Nuance Communications to bring speech recognition capabilities to Watson (initially, specifically for healthcare).

Watson’s Next Careers

After Watson’s first (albeit brief) stint as a television star, it is ready to explore more “mundane” careers. But what are these careers likely to be?

While the Star Trek computer was a model for at least some of IBM’s researchers, most of Watson’s opportunities will be much more down-to-earth. Many are based on the coupling of Watson’s “Deep Question Answering” technology and deep analytics in decision support applications. Possibilities—or indeed, probabilities—may include:

  • Customer Service, which could improve service time and quality while simultaneously disrupting a business model in which so many call center jobs have moved to low-cost countries;
  • Financial Analysis, such as in the combing of huge quantities of structured data and unstructured information to identify likely acquisition targets;
  • Travel, such as in a new-generation navigation system in which drivers can ask for best ways of avoiding traffic, or more interestingly, to suggesting routes from X to Y that take one past attractions that best meet your profile, such as museums, restaurants or wineries that make 90+ point wines; and
  • C-suite assistant, to identify and assess business trends, evaluate a broad range of contingencies or running what-if analyses, such as the impact different product and advertising mixes may have on revenue and profitability.

This leads to what is probably the most important and imminent of applications for Watson Technology—its use in health care. Although the potential applications are numerous, the first and highest-impact application is likely to be in diagnostics, such as where a doctor can input lists of symptoms, medical histories, and a broad range of other relevant information to identify possible illnesses.

Better yet, it could be used to review individual electronic medical records to identify symptoms that a doctor may miss or large volumes of electronic records to identify linkages that have not previously been discovered. Longer term, it could even be used to bring first-line diagnostics to remote, emerging country villages that do not have access to doctors, such as by allowing nurses or technologists to input systems into a computer, to a remote Watson-based diagnostic system.

Many potential applications, as in health care or engineering, could face big legal questions. What if Watson made a mistake in diagnosing an illness or in calculating tolerances for a bridge? Or what if Watson correctly suggested an option, which was dismissed by the doctor or engineer? Or have we taken the first step into the science fiction era, where computers may obviate the need for humans in even some of the most demanding of professions?

While the answers to such questions will have to wait, the application of Watson technology to these challenges will not. The day after Watson’s Jeopardy victory, Columbia University Medical Center and the University of Maryland Medical School announced a plan to work with IBM on health care analytics research, with a goal of launching a commercial diagnostic and treatment offering over the next 18-24 months.

We will have to wait to see whether Watson will be as successful in its future careers as it was in its first. My guess, however, is that Watson’s descendants will have as great an impact on society, business and the nature of knowledge work, as the Internet.

Posted in IBM, Innovation/Entrepeneur, Job and Career Opportunities, Technology's Impact on Job Skills | No Responses »
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How IBM is Helping Entrepreneurs Build a Smarter Planet

Sunday, May 9th, 2010

IBM, like all other large IT vendors, has many types of programs to help small software companies build solutions atop the vendor’s infrastructure. These programs range from:

  • Huge “breadth programs”, such as Software Group’s PartnerWorld ISV & Developer Relations program, which provides technical and marketing support to thousands of ISVs of all shapes and sizes; to
  • Highly-focused “depth programs”, such as that of its Venture Capital Group, which builds strategic partnerships to help VCs identify and nurture portfolio companies that can deliver particular value to the IBM ecosystem.

The company’s new Global Entrepreneur Initiative is intended to combine benefits of both. The initiative, which was announced in Bangalore at IBM’s annual Venture Partnering Symposium, is intended to “help entrepreneurs gain the skills they need to bring new ideas to market faster using IBM technology to accelerate industry transformation and fuel innovation.”

This effort casts a wide net to identify particularly promising start-ups that, while not having hit VC’s radar screens, have the potential of significantly advancing IBM’s Smarter Planet initiatives in specific segments. Once it identifies these companies, it will provide them with a broad range of the type of deep support capabilities intended to accelerate their development and deepen their relationships with IBM. But while this initiative is different from those of the above mentioned efforts, it is linked directly to both. It, for example, was launched by IBM’s Venture Capital Group and is intended to bring promising start-ups to the attention of the company’s VC partners. Much of the support, meanwhile, will be provided by IBM’s ISV & Developer Relations Group.

Looking for a Few Good Smarter Planet Entrepreneurs

The criteria for participation in the initiative are broad. Candidates must:

  • Be privately-held;
  • Have been in business less than three years;
  • Be actively developing software aligned to IBM’s Smarter Planet focus areas; and
  • Develop their solution on the IBM software platform.

Qualification for admittance, however, is rigorous and selective. The solution, for example, must not simply be “aligned” with, but must offer “transformative opportunities” around Smarter Planet. The company must be judged to have a “competitive opportunity to survive in the market” and its solution must have the potential to “provide real value to customers”.

This, however, is only the first cut. Those start-ups who qualify are invited to participate in one of what IBM expects to be a minimum of seven SmartCamps that will be held in different countries over the next six months. These camps are networking and mentoring events that bring start-ups together with appropriate IBMers, VC and university partners and differing combinations of 19 global industry and technology associations in the host country. These associations include TiE Silicon Valley and the Mass Tech Leadership Council in the U.S.; the National Consortium of University Entrepreneurs and SE Business Innovation & Growth and Enterprise UK in the United Kingdom; The Israeli Venture Association and SvoiBiz in Israel; TiE, and the Indian Angel Network in India and Journees de L’entrepreneur and ADEN in France.

While IBM and partner representatives will help all participating start-ups assess and tune their messages and business plans, they will also serve as judges for the next stage of the qualification process—a competition in which each of roughly 20 to 30 qualifying start-ups presents its Smarter Planet value proposition and business plan. While each SmartCamp will produce a single winner, all finalists will be admitted to the program.

Although thousands of start-ups will apply for the program, IBM expects that no more than 10-20% will be admitted. The total is likely to consist of “a couple of hundred companies, not a couple of thousand”.

Membership Has its Privileges

Those who qualify enter a three-month mentorship program in which IBM will help them build their business plans, optimize their architectures and develop joint value propositions. Each start-up will have access to a custom-designed package that combines:

  • Free access to IBM’s software portfolio and relevant industry frameworks (such as for Smarter Water, Smarter Buildings and Smarter Health Care) through a cloud computing environment;
  • Technical architecture support through access to IBM software engineers and scientists, product development assistance from dedicated IBM project managers and access to the 8 million developers in IBM’s developerWorks program;
  • Business plan mentoring, industry insight, marketing support and go-to-market assistance, both directly from IBM and its full network of partners, including academics, industry experts and government leaders;
  • Improved visibility among, access to and potential for funding from IBM’s VC partners; and
  • Credibility among and IBM’s help in accessing IBM customers.

Much of this assistance will be coordinated by IBM’s ISV & Developer Relations Group, and delivered though its global Innovation Center network. The company’s new Global Entrepreneur partners, however, will have access to more personalized, programmatic and deeper access to more services than are available through other IBM’s other developer programs.

It is too soon to assess the number of partners IBM’s new Global Entrepreneur program will ultimately produce, and how many of these companies will yield the type of transformative Smart Planet business that IBM seeks. The program, however, is generating interest, with more than 200 applicants in the first 30 days since the program was announced.

Posted in Corporate Social Responsibility, Creating the 21st Century Workforce, IBM, Innovation/Entrepeneur, IT Company Strategies, IT Industry and Companies, IT Industry Trends, Job and Career Opportunities | No Responses »
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IT Companies as Catalysts in Creating the 21st Century Workforce

Monday, January 11th, 2010

The following is a high-level summary of a more detailed report that summarizes the findings of six months of research into the changing nature of U.S. knowledge work and the requirements for creating a generation of knowledge workers who will not just be able compete, but will not be able to add differentiated value in a global knowledge economy. For a free copy of the full report, click here.

We’ve all seen the statistics and the anecdotes surrounding the declining technical skills of American workers. Although unemployment is at record highs, many positions go fulfilled for lack of qualified applicants. U.S. student interest and skills in science, technology, engineering and math (STEM) education is plummeting relative to other those in other countries and the U.S. is making it increasingly difficult—and unattractive—for talented foreign students and professions to enter and remain in this country. U.S. manufacturing workers lack the skills to work in new-generation factories and promising green tech firms are leaving the U.S. in favor of countries with larger markets and more sympathetic governments.

Unfortunately, most signs suggest that things will get worse, before they get better.

IT vendors and service providers that are based in or have operations in the U.S. face particular challenges:

  • They will find it increasingly difficult to find sufficient numbers of graduates with appropriate skills and will either have to implement “remedial” programs or increase their use of offshore talent;
  • If IT vendors/providers will have trouble finding skilled people, customer IT organizations are likely to face desperate skills shortages;
  • A decline in math and IT skills among customer’s business professionals threatens to limit appreciation for, experimentation with, and adoption of new IT capabilities.

But while IT vendors face some of the greatest challenges from a U.S. skills gap, they are also the best positioned of any major type vendor to address the problem. These vendors, after all, created and will continue to create the tools that are revolutionizing work. They are also pioneering many of the organizational and business revolutions that transform the work environment of the future. IT companies, for example, have been among the leaders in transforming, automating and optimizing traditional business processes, in disrupting revenue models of traditional industries and in globalizing knowledge work and business processes that few ever dreamed could go offshore.

It’s only logical. Companies that are this involved in shaping and defining the future of knowledge work, are also among the best positioned to understand the skills that tomorrow’s workers will need. Although many such companies are already using their large, established training organizations to directly prepare some of their customers and their partners’ employees, a growing number are going much further.

They are forming increasingly innovative partnerships with universities (and to a lesser extent, all types and levels of schools) to help foster the educating of next-generation employees. Schools, including some that traditionally shunned such collaboration as an infringement on their academic integrity, are increasingly welcoming this help as a means of better preparing their graduates for jobs in one of the most challenging job markets in memory.

These types of partnerships, which can include access to free or low-cost hardware and software, help in designing curricula, courses and Internet-based delivery systems and joint research, are beginning to yield some big benefits to the companies and schools alike. In the end, however, students are probably the biggest beneficiaries.

We are, however, only early in to the second generation of such partnerships. The real benefits—to IT companies, schools, students and to the IT companies’ customers and communities—are still around the corner. So, as discussed in some of our recent articles and reports, some vendors and some universities are already beginning to reap some big strategic and financial dividends from their initial partnerships.

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, Globalization, Immigration and Offshoring, Innovation/Entrepeneur, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, IT Industry's Role, Job and Career Opportunities, K-12, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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Time for a New Job Search Strategy?

Sunday, October 25th, 2009

My Sept 27, 2009 blog, Leveraging University Education into Careers for the New Economy,  provided recommendations for students looking to structure their coursework in a way that would increase their odds for getting a job. But what about knowledge workers who have already graduated and now find themselves among the 9.7% of the workforce that is unemployed, or the 16.7% that is underemployed? What can these people do to maximize their prospects?

Some professionals, such as engineers, nurses, statisticians and, to a lesser extent, math and science teachers (to the extent they are out of work), generally have few problems in getting a new job. These and other specialty-skill job openings (including some high-skill blue collar jobs, such as for precision welders) are, in fact, going begging for qualified candidates. Similarly, some metropolitan markets, such as Washington D.C. and Baltimore (which employ large numbers of government, medical and defense workers), still have tight job markets. Unemployment remains at a relatively low 6.2% and, according to a Wall Street Journal article, there is one job opening for every unemployed person. Even this, however, doesn’t help those that don’t have sought-after skills.

For the most part, jobs are tough and they are going to remain that way. The Labor Department, for example, calculates fewer job openings in July than any time since it started tracking these numbers in 2000. In fact, the current level of 2.4 million job openings are half of the number from the mid-2007 peak.

Some metro areas–especially Detroit—are in particularly tough shape, with unemployment rates of up to 17.7% and as many as 18 unemployed people chasing every opening. And to make matters worse, the combination of factors such as plummeting home values, a dearth of home buyers, diminished savings accounts and limited availability of credit, make it difficult for people to move to locations with better (or at least less worse) job prospects.

As bad as things are now, few economists expect things to get much better any time soon. Speculation and growing evidence suggests a jobless recovery in which companies will rebuilt inventory and address initial demand by increasing the hours of current employees and, where necessary, hiring part-time and temporary workers. Most firms prudently plan to await solid, demonstrable, sustainable increase in demand before hiring new workers.

What should a laid off professional do? Give up and stay at home? Hardly. Even if current prospects are slim, shutting down a search and dedicating time to watching TV instead is self-destructive—both to one’s current attitude and to future employment prospects.

As I see it, everyone in this position should take some combination of five steps:

  1. Continue and expand your networking, both physical and virtual though the use of online social media.
  2. Keep your existing skills current or go back to school to learn new skills in fields that promise to offer better job prospects;
  3. Learn technical skills that complement those of your chosen career (especially relevant IT, math and science skills) that will allow you do deliver higher levels of value;
  4. Document your skills development efforts so that when you do get an interview, you can clearly demonstrate the currency of skills, your adaptability and ambition; and perhaps most importantly,
  5. Diversify or adapt your search strategy by positioning yourself as a temporary or part-time solution to a pressing employer need, rather than as a full-time employee.

This fifth step will be difficult to for many to swallow. It will, however, be particularly appropriate over the next 6 to 12 months as business begins to expand and corporate profits increase, but as companies, uncertain of the future, remain skeptical of committing to new expenses.

True, this approach will probably entail lower pay, little or no job security and no benefits. Worse still, it may make it more difficult for the under-employed to search for a full-time position. On the positive side, however, this strategy will allow you to position yourself as a low-cost, low-risk solution to a company’s staffing needs, rather than be part of the problem of increasing overhead in an uncertain economy. It will also give you an opportunity to prove yourself (for when the company is ready to hire), allow you to bolster your resume and (hopefully) learn new skills.

Moreover, selling yourself as a part-time solution to a pressing problem will also be great training for what many laid off professionals will find to be their best long-term career opportunity—becoming a consultant or starting your own company.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Innovation/Entrepeneur, Job and Career Opportunities, Skills Requirements, Societal Forces, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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Two Approaches for Reintegrating into the New Workforce

Monday, August 10th, 2009

Who would have “thunk” that the announcement of 247,000 lost jobs in July would prompt such joyous celebration by investors and economists? This is especially ironic given that:

 

·         The number of people who have been unemployed for 27 weeks or more rose to just under 5 million—more than one-third of the total—a sign that cyclical unemployment is turning into more pernicious structural unemployment;

·         The country must produce 100,000 new jobs each month just to keep up with the number of new entrants to the workforce; and that

·         The incremental fall in the unemployment rate, from 9.5% to 9.4% was primarily because so many discouraged jobseekers stopped looking for jobs.

 

The fact that all of this is being hailed as such good news (and in a macroeconomic context, it is very good news) is a sad commentary on our times. Although a few sectors, especially healthcare, education and government, continue to generate net new jobs, many of the jobs that have disappeared over the last couple years are not likely to come back. Industries including automotive and financial services may never see the rates of employment they have had in the past. Others, like construction and retail, will take years to recover. Economists now claim that the U.S. will not likely recover all of the jobs lost during the Great Recession until 2014.   

 

This new bout of unemployment is likely to bear particularly heavily on two segments of the workforce—the Millennials who are being foreclosed from their first real jobs and the millions of Baby Boomers who are not financially prepared for retirement, but are unlikely to ever hold a job that is comparable to those they have lost.

 

But as bad as the situation may appear, if we search very carefully, we can find signs of hope in all the economic and societal rubble. These signs, fall into two primary buckets:

  1. Starting your own business. Recessions tend to breed new business creation  (http://genylabs.typepad.com/small_biz_labs/2009/01/does-recession-lead-to-increased-small-business-formation.html). The last two recessions actually saw small business births exceed the number of deaths, and that was before the widespread adoption of the Internet, which simultaneously creates new business opportunities, reduces costs, and enhances the ability to effectively and cheaply reach potential customers.  
  2. Developing marketable skills. Many of the new jobs that are being created suggest the type of skills that will be required to qualify for some of the highest growth, highest value, most sustainable jobs of the future. These include deep skills in applied technical disciplines (medicine, biotechnology and nanotechnology, to name a few), statistical and mathematical modeling and computer engineering. Just as importantly, most new jobs, including those in non-technical areas will require a deep, almost intuitive understanding of how to use computers to achieve business results. Success in many of these jobs will increasingly require a mastery of social media and the use of Web 2.0 tools to find and contribute to communities, identify opportunities and promote one’s self and the value you can provide to customers, clients and employers.

 

Come to think of it, many of the skills that will be required to find and succeed in a high-value job will also be required to start and build a profitable small business!

 

What new career opportunities do you see?

 

 

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Innovation/Entrepeneur, Job and Career Opportunities, Societal Forces, Technology's Impact on Job Skills, Workforce Trends | No Responses »

The IT Vendor’s Employee Readiness Burden

Tuesday, August 4th, 2009

Preparing the U.S. workforce for the needs of the 21st century is everybody’s responsibility. For example:

  • Corporations must ensure that they will have an adequate supply of, and the ability to retain workers with the appropriate skills;
  • Schools must provide students with the type of life skills, as well as the work skills that will be required for the uncertainties of tomorrow’s job markets;
  • All students and employees must take more active role in managing their careers; and
  • Governments must communicate the needs for new skills, encourage and enable the type of businesses that will create jobs and shelter employees from the vicissitudes of a global economy.

While all members of society bear responsibility for ensuring that they are prepared for the requirements of the new world of work, technology-intensive companies bear particularly heavy burdens: After all, they

  1. Have the greatest needs for the type of workers that will be in shortest supply in the U.S., and virtually all other developed countries-those with deep mathematical and technical skills; and
  2. Are being forced to globalize their workforces to ensure ongoing access to the best skills, at competitive costs-practices that threaten to put them at risk of running afoul of growing societal and government restrictions on hiring foreign citizens (both within and outside the U.S.).

While all technology companies face big challenges, IT vendors and IT services companies face even greater challenges. Not only must they ensure that they have sufficient skills to address their own needs, they must also ensure that their customers have access to the skills required to make effective use of the vendors’ products. They must, for example:

  1. Ensure that customer IT organizations are able to implement, manage, maintain and optimize operations of the vendors’ technologies (or, as an alternative, the vendor/service provider must provide the people that can outsource operation of the customer’s IT environment);
  2. Make sure that the business users of the vendors’ tools and applications understand how to gain the greatest business value from these products.

Why are these unique requirements so critical? Quite simply, if customers can’t derive full value from a vendor’s product, they are less likely to buy it, or refer it to other customers.

Given IT vendor and service providers’ particularly pressing needs, these vendors are among the leaders in:

  • Training and managing career paths of their employees;
  • Developing tools to automate relatively routine functions and to deliver higher value to discretionary functions;
  • Working with educational institutions in general, and universities in particular, to ensure that students receive the type of educations that will prepare them for new jobs; and
  • Globalizing their workforces, both by hiring foreign nationals to work in the U.S., and by creating offshore service centers and centers of excellence.

So, while my research on developing sustainable, high-value jobs will examine the needs of and the best practices being developed by companies across all industries, I am focusing my primary research on those of the IT industry.

Having said this, I need your help. Given my primary focus on, and my 30-year history in the IT industry, I may lose sight of unique requirements or leading-edge work being done by companies in other industries. So please tell me if you know of issues or best practices that I may be missing.

Posted in 21st Century Careers, Corporate Social Responsibility, Creating the 21st Century Workforce, Education System and Institutions, Globalization, Immigration and Offshoring, Innovation/Entrepeneur, IT Industry and Companies, IT Industry Role in Education, IT Industry's Role, Job and Career Opportunities, Skills Requirements, STEM Careers, Technology's Impact on Job Skills | No Responses »

The Impact of Offshore R&D on America’s Technological Competitiveness

Thursday, July 9th, 2009

The Conventional Wisdom

There was no debate. The diagnosis was virtually unanimous. Although the U.S. remains the overwhelming leader in technological innovation, its lead is declining. First there was the Japan challenge of the 1970s and 1980s; then the Asian Tigers in the 1980s and 90s; now it is India and China. Both are huge countries with educated populations and demonstrated strengths in different, but complementary technological areas—software development and manufacturing, respectively—with both in the process of building world-class R&D capabilities in critical technologies including IT, pharmaceuticals, nanotech and in many segments of GreenTech—especially around critical, potentially foundation technologies such as lithium-ion iron phosphate batteries.

 

The high-level prescriptions had been similarly virtually unanimous. First, the U.S. must dramatically increase educational quality and quantity (number of graduates) in all types of technical disciplines (science, engineering, math, IT, or SEMIT). And it should do so at all levels of the educational spectrum, from secondary schools, through trade schools and community colleges, through the leading research universities. Second, the U.S. must dramatically increase the amount of high-level R&D investment—both directly through government spending and indirectly though tax incentives for corporate investment.

 

The debates had been on the details—how much, which technologies, what should be the level of government involvement, how to accomplish each goal and so forth.

 

A Radical Rethink

Columbia Business School Professor Amar Bhidé, however, has recently made a heretical argument that fundamentally challenges the conventional wisdom. He argues that not only will the commonly accepted prescriptions not work—they will end up damaging the U.S.’s long-term technological competitiveness. He argues that the U.S. should encourage a proliferation of high-level, global research that results in scientific publications and patents.

 

He further suggests that rather than encourage our children to grow up to become PhDs, we should encourage them to develop solid foundational SEMIT skills that they can apply to business disciplines. Why? Because high-level scientific information increasingly passes seamlessly across borders and is available at a relatively low cost. The real economic value is created not by the high-level concept, but by the “mass productization” of the concept, the commercialization of the offering and, especially, by its productive use by its customers. Therefore, the U.S. would get a much greater bang for its technological buck by offshoring much of the high-level R&D and focusing domestic efforts on developing, commercializing and applying this technology.

 

Beyond IT Recommendations

This hypothesis, while running counter to the accepted wisdom, has profound implications. The U.S. must certainly improve our own SEMIT education and all levels through university. Although we must do all in our power to sustain the supremacy of our graduate research programs, we should accept the fact that these programs will continue to be populated largely, if not predominantly by foreign-born students. Contrary to current government policy, we should make it easy and attractive for these graduates to remain in the U.S. while assuming that a growing percentage will find it more attractive to return to their home countries.

 

As a national priority and corporate necessity, the U.S. must domestically control its overall high-level research agendas. However, some key technology research should not only be allowed, but encouraged to be performed offshore. But while offshore research should be allowed to expand significantly, U.S.-based companies must control their own long-term agendas, either through captive offshore research arms or though close guidance or collaboration with partners.

 

However, although we should allow growing portions of our basic research to be performed offshore, the U.S. must continue to own a number of other links of the R&D value chain, Our focus, rather than on training huge numbers of pure scientists, should be on training two other types of SEMIT-savvy people:

 

  1. Mid-level solutions engineers that are focused on applying technology to addressing market requirements. These engineers would pick-and-choose among basic research innovations to determine those that are best suited to addressing customer needs and create marketable products.
  2. A much larger number of business architects who would tailor these new solutions of the unique requirements of particular companies.

 

Successful utilization of these new professionals will require new and different training and management programs, and career paths.

 

Potential Gotchas

Every approach, including this one, has risks. As I see it, there are three particularly big potential pitfalls in relying on offshore sources for basic innovation:

 

 

  

  1. A country that develops key “chokehold” technology refuses to make it available to foreign companies;
  2. The U.S. is slow to adopt, and therefore loses ground-level leadership in critical applied technologies, such as CleanTech; and
  3. U.S. companies focus on applying technologies to the needs of rich, developed markets, and leave the application of technology to emerging companies to other companies—thereby forgoing high-volume markets and allowing non-U.S. companies to build secure beachheads from which they can attack developed country markets.

 

The good news is that each, as discussed fully in my report,The Impact of Offshore R&D on U.S. Technological Competitiveness, has different levels of risk and each can be proactively remedied.

 

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, Innovation/Entrepeneur, IT Industry and Companies, IT Industry Trends, Skills Requirements, STEM Careers, Technology's Impact on Job Skills | No Responses »

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