deal architect

For Satya Nadella, Business is Personal

David Pogue stole the title of this post in this CBS News story on Satya Nadella, CEO of Microsoft. During the analyst summit in Redmond a couple of weeks ago (see my write up here), I picked up a copy of his book, Hit Refresh and after reading just a few pages, I had decided on that title.

First, some of my thoughts on Microsoft. I have always found the company a bit of an enigma, at least when it comes to enterprise tech. I used to follow Great Plains at Gartner, liked Doug Burgum and his team, was excited when Microsoft acquired them. But then Microsoft acquired Navision and got mired in its Project Green project to rationalize these two and other ERP assets it had. For years it seemed. In The New Polymath in 2010, I excitedly wrote about Microsoft’s cloud data centers. It seemed to take an eternity before Microsoft’s O365, Azure and other cloud initiatives started to take off. I was excited to hear about One Microsoft in 2013 and how it could bring to bear products from its sprawling empire to the benefit of enterprise customers like Delta Airlines. At the recent analyst summit, I felt like I was prying details of that approach and whether Microsoft was committed to it.

So, let’s just say I opened the book with a bit of “not knowing which Microsoft” I would be reading about. You know right away it is not a typical business executive book about goals and results. The book’s press describes Satya “as much a humanist as engineer and executive.”

He shares lots of personal details about growing up in India, his continuing love for cricket, his wife Anu and the challenges getting her a visa (unbelievably he gave up his green card and get an H-1 visa to be able to accelerate her entry into the US) and their son Zain with special needs.

He has written

Becoming a father of a son with special needs was the turning point in my life that has shaped who I am today. It has helped me better understand the journey of people with disabilities. It has shaped my personal passion for and philosophy of connecting new ideas to empathy for others. And it is why I am deeply committed to pushing the bounds on what love and compassion combined with human ingenuity and passion to have impact can accomplish with my colleagues at Microsoft.

Empathy is a word business executives have learned to use, but it is often skin deep. So number of companies will talk about diversity in the workforce, but it is often just an intro to help them dive into a sales pitch how their capabilities can help measure workforce diversity. With Satya, the term is almost spiritual. When he talks about the soul of the company, when he says the C in his CEO stands for culture, or how he uses the digital assistant Cortana to help him remind of personal commitments he has made, he is believable. To his credit, he also talks about missteps like his faux pas early in his CEO role when he advised ladies to accept wage disparity and that karma would take care of them longer-term. He acknowledges in the book  “any advice that advocates passivity in the face of bias is wrong”.

If the book had focused only on his personal  background and beliefs it would not be that interesting. In fact some may still think it borders on preachy. The word “empathy” shows up early and often (I quit counting at 50).

There are three other dimensions to the book which make it highly readable

First are his perspectives as a technology visionary. As an innovation author, I particularly enjoyed a chapter titled Beyond Cloud which goes into Microsoft investments in Mixed Reality, Artificial Intelligence and Quantum Computing. (BTW I recommended to my son he read at least this chapter, and I would offer the same advice to any young person)

As he says (and shows with number of examples)

Mixed reality will become an essential tool in medicine, education, and manufacturing. Al will help forecast crises like the Zika epidemic and help us focus our time and attention on things that matter most. Quantum computing will give us the computational power to cure cancer and effectively address global warming.

It’s not just about Microsoft. He is generous with examples about digital leaders – Amazon, GE, Uber among them - even if they are competitors or customers of other vendors.

Secondly, there are lots of details about the personal imprint he is putting on Microsoft including pushing for the Windows 10 launch in Kenya – such a contrast to the massive Rolling Stones Windows 95 launch in a previous generation.  He is particularly impressive when he talks about his approach to partnerships and acquisitions – his outreach to Apple, Google and Salesforce among others.  How he mended frayed relations with Samsung and Yahoo. How he recruited Peggy Johnson from Qualcomm to help make “Silicon Valley our best friend”. How he crafted acquisitions as diverse as LinkedIn and Minecraft.

How he has developed what he calls a “growth mindset” in his leadership team and discourages whining

“To be a leader in this company, your job is to find the rose petals in a field of shit.” Perhaps not my best line of poetry, but I wanted these people to stop seeing all the things that are hard and start seeing things that are great and helping others see them too. Constraints are real and will always be with us, but leaders are the champions of overcoming constraints. They make things happen.

To me the biggest impact he has made is get engineers excited about working at Microsoft again. During the summit couple of weeks ago, I had a chance to have dinner with two mid-level executives, Charles Lamanna and Steven Kaplan who had presented to us, and then engaged in email conversations with them. Driven, curious and polite – if they represent the talent Satya is able to groom, other vendors have definite reason to be concerned.

Finally, there are an incredible range of inspiring quotes throughout the book like

If you know to paint with math and science , you can make anything, and

If quantum mechanics has not profoundly shocked you, you have not understood it yet

Satya is very well-read (as are his co-authors, writers in the Microsoft family) and it shows in the text.

Every time I go to Microsoft buildings in the Seattle area, I am reminded of a visit to the Egyptian Museum in Cairo. You know you are going to the mother lode, but the place is bursting at the seams and you need a really good guide to help you around.

I heard a Microsoft exec once say

“We may not always be able to deliver, but I want customers to think of calling Microsoft first anytime they have an opportunity where technology can help”

After reading Hit Refresh I am even more convinced of that.

Microsoft PowerApps and “Citizen Code”

One of the most interesting sessions during the Microsoft Analyst Summit last week was one on PowerApps. The look and feel leverages the fonts and other features most of us are familiar with in MS Office. It's in Microsoft lingo "True WYSIWYG".  They leverage a  Common Data Service and come with hundreds of standard business entities already defined. They include workflow automation with Microsoft Flow. Finally, they have connectors for over 200 cloud services and on-premises data sources, including SharePoint, SQL Server, Office 365, Salesforce, Twitter, and more.

All this is being leveraged by Microsoft ISVs to build production quality apps, but this ease of development has resulted in proliferation of citizen coders and those at small resellers

Charles Lamanna, General Manager, Application Platform at Microsoft described several PowerApps use cases but three of them in the middle really stuck out for me.

Each is progressively more complex 

a) Brian Dang (aka mr-dang / @8bitclassroom) is a third and fourth grade teacher in Southern California. This story is not a business story, but rather a passionate individual, a teacher, who has transformed his classroom and won over hearts and minds with his PowerApps solutions.

Brian taught himself PowerApps when it was in Preview and has continued to stretch what is possible with the platform. In the second half of 2017 he decided to take a one year sabbatical from his teaching role to focus on building apps and evangelizing PowerApps.

All the kids in Brian's class use Google Chromebooks. This usage of PowerApps is an example of Microsoft technology being used in a district which is otherwise mostly run on Google products and services.

b) Hawkary distributes pharmaceutical products to doctors in Iraq. Several hundred field representatives call on doctors across the country to educate, place samples and take orders for pharma products. It employed Excel and email to collect “daily reports” from these reps. Sorting through emails to find attached Excel files, then opening hundreds of Excel files to glean insights from the reports was time-consuming. It was nearly impossible to do meaningful analysis across all these sheets – how many times was a product promoted, how many daily visits were sales reps doing in a certain region, trends over time on a particular product sample uptake, and so on.

Mohammad, a pharmacist by training, considers himself a “tech enthusiast” – in the past he taught himself how to use Microsoft Access, then discovered and began using PowerApps, Flow, Power BI and the Common Data Service. Leveraging these tools, and learning through videos and help on the community forums, he built a solution combining all the Business Application Platform products.

c) A solution developed by partner firm, Confluent. IPS is North America’s leading provider of services for electric motor and generators used in continuous process industries, including power generation (fossil, hydro, wind and nuclear), petrochemicals, metals, air separation, mining, paper, cement, oil and gas. Headquartered in Greenville, SC, they have 20+ repair facilities across US and Canada serving 4,000 customers.

Repairing customer equipment is a lengthy, multi-stage process inspecting and disassembling customer equipment, quoting the customer on equipment service, performing repairs or maintenance (sometimes parts are in three different locations at one time), reassembling repaired equipment; performing a final test, and shipping the equipment back to the customer. Much of this was supported by passing paper dockets around. Photos were uploaded to a server but filed using a manual naming process. Scaling photo aspect ratios for tablets was cumbersome. Reports were manual.

In six months, IPSS and Confluent created an electronic process that is independent of its ERP system, doesn’t use paper forms, and works no matter what language their data is in (SAP, Oracle, etc.). Storing data in the Azure cloud allows for much easier tracking of equipment across repair, winding, or machining phases.

Of course, there are many more sophisticated apps being developed with the tools – see here.

I asked Mike Ehrenberg, Technical Fellow at Microsoft if we were unleashing a new torrent of uncontrolled apps to the world. I told him of our proliferation experience with Lotus Notes apps at PwC in the early 90s. He smiled and talked about Ray Ozzie, the architect of Notes and later CTO at Microsoft.

We have come a long, long way since! 

Ten thousand points of influence

A decade ago, I wrote this post which talked about the thousand points of influence in every technology decision. My goal was to highlight attention on the fact that most vendor AR, back then, was fixated on Gartner magic quadrants and Forrester waves whereas there were plenty of bloggers who influenced deals. AR folks were even less familiar with boutique firms like Strativa in vendor evaluations and Net(net) in vendor contract negotiations.

I had heard an ambassador say that after the Soviet Union broke up, his peers had a tough time adjusting to the fragmented E. European landscape. Something similar had happened to technology analysis.

That has gradually changed. The Enterprise Irregulars did not exist back then. Irregulars is an improper moniker today for this group. There are not too many enterprise vendors they do not follow regularly. Names like Diginomica, Constellation, Deal Architect are much more recognized than they were a decade ago. Most vendors have caught on to the blogger and social media phenomenon.

Except that they have not.  Many measure bloggers on number of tweets from their events as a proxy for influence. In reality few enterprise buyers are on Twitter. Also social media has led to a plethora of “pop analysts”. Many work for vendors and could not spell independence if you spotted them the c,d and n’s. Others have so much politics in their streams that you wonder if they are rehearsing to become political commentators for Fox or CNN or covering technology. Few have written a 20 page paper in years, much less a detailed report or book where they interviewed hundreds of customers. Few consult with or even talk to buy side executives and practitioners on a regular basis and have little fact-based realism in their work. But they sure can brag about the followers they have on Quora and Instagram.

And you also see how other parts of the vendor organization often still lives in the past. Example - procurement groups which sometimes mistake independent analyst or boutique consulting firm to mean independent contractor and cause tons more paperwork for all parties.

There have been so many other changes in the last decade. My New Florence blog, not lacking for sources of innovation for its 4-500 entries a year, regularly mines magazines which were long ago supposed to be dead. My six books have cataloged hundreds of technology vendors and innovative customers that do not show on Magic Quadrants. My advisory work has changed dramatically – much more about cloud economics, ring-fencing legacy applications, automation of processes and digital transformations. 

It’s not just AR groups and procurement. Competitive Intelligence groups have not evolved. The reality is IT vendors are now just a small part of the technology landscape. I know companies which spend way more on design firms like Ideo and contract manufacturers like Foxconn than they do on IT strategy and outsourcing firms.  Their VP of Products has more of a technology budget for making products smarter than does the CIO. Ditto with the Chief Marketing Officer.

Thousand points of influence? I was off by a factor of at least 10 a decade ago. Which actually leads me to empathize with vendor marketers who have to navigate this complex landscape. The world is way more complex than 4x4 graphs and tweets.

Microsoft Business Applications Analyst Forum–a scorecard

Readers know my favorite vendor event format is the analyst summit. I have written extensively about Workday, Salesforce, Oracle, Plex and other summits on this blog and at New Florence.

Interestingly, while other vendors have been perfecting the art of the analyst summit (see here, here and here) Microsoft which used to run a very informative and enjoyable annual summit has moved away from them. For four years it did not have one. So I was pleased they convened one this week.

I will have several posts from the event over the next few days, starting with this scorecard

Location - A

While most vendors have been using hotels and other external locations for their summits (and Microsoft also did in past), this time it used Building 92 at its sprawling Redmond campus. While it may not have been as picturesque (especially with the unusually dry weather when we were in town), it more than made up in reliable wi-fi, AV equipment, pantry and  plenty of space for one on ones. Bonus – we got to mingle with many new hires who were at the building for their orientation. You could feel their excitement and nervousness, and it reinforced the vibe of a Microsoft in transition.

Photo below of fellow analyst, Holger Mueller outside the building

Executive Access – A+

During the sessions, at dinner and in one and ones, Microsoft made available plenty of access to the executives. I am greedy with my questions as my colleagues kindly tell me    so appreciated the access. I also found the executives repetitively thankful to the analysts for making the long trek to the Pacific NW. They need not have but the humility and hospitality was noticeable.

Photo below of panel with Jeff York, Hayden Stafford, Alysa Taylor, James Phillips and Clare Henry representing the finance, engineering, marketing, and sales leadership of the Applications Group. Not on panel, but omnipresent during the event was senior statesman and visionary, Mike Ehrenberg.

Content – A-

The event was very well paced and covered wide ground with slides, panels and demos. From a business process perspective, CRM dominated especially with recent moves with LinkedIn and partnering with Adobe. That was understandable because the audience was heavily skewed towards CRM analysts. The Finance, Operations and People/Talent areas got much less focus as a result. To me this is another sign of Microsoft in transition – a far cry from the Great Plains and Navision that used to define Microsoft Applications in the past. Another transition is in the partner ecosystem – no longer just the Great Plains type reseller to a wide range of ISVs and SIs which represent Microsoft’s own broad portfolio with the Azure cloud, machine learning and other products. It was good to have a session on the changing partner landscape. Also brave of Microsoft to have a licensing and pricing session. That is an area most vendors like to keep opaque pretending that as analysts we don’t hear about it all the time from their customers. A customer executive panel with reps from the Seattle Seahawks and MacDonald-Miller was especially interesting to me. I am always looking for my books for innovation in places where you don’t often expect it – and to hear of data scientists and use of Azure in sports and HoloLens and smart buildings in construction brought out other dimensions of Microsoft’s product portfolio. The demos with the LinkedIn integration and the PowerApps which bring end user familiarity with Office apps to allow for developing a wide range of “citizen code” to demanding, transaction intensive applications were particularly striking

I would like to have seen more on industry applications. This is something I am bugging every vendor about. So many industry specific “books of record” are long in the tooth, and yet most vendors are just trying to develop and sell horizontal apps. Also, I would have liked to hear about more recent One Microsoft examples as in Delta and MetroBank in the past .  To me, Microsoft sometimes "goes low" and focuses on tactical competition with ERP and CRM vendors, when the world around it is being defined by GE’s vision of the Industrial Internet and impact on smart products, asset management and field service, advanced manufacturing and Industrie 4.0 concepts that companies like BMW and Boeing are deploying on their shop floors and Amazon’s sweeping vision for logistics. It is one of the few vendors which can pull all kinds of capabilities together to solve grand challenges customers face. 

In fairness, Microsoft was playing catch up in many areas after missing the summit in prior years. As it swings back to an annual format, the agenda should be more reflective of its broad and ever evolving capabilities.

Davos Debrief – Part 2

Second half of my conversation with Malcolm Frank about this year’s WEF in Davos. Part 1 ran last week here

There were a couple of themes we discussed with many executives there. One was around where we see digital going and where our clients need to focus their businesses in the next five years. The second is, what about the future of jobs? We presented our research on the 21 Jobs of the Future. We also announced our reskilling initiative with several other technology leaders at Davos on how we aim to retrain a million workers for digital skills of the future. Those were our two big things, and they both seemed to resonate well.

When it comes to digital and its potential impact on jobs, I think the view now is a fairly balanced one: that technology giveth and technology taketh away.

What's fascinating, if you look at today's market, is that have we not seen mass layoffs from digital automation that some have predicted. After all, in the United States we are essentially at full employment. What has actually occurred is digital has now created a huge skill gap, the need for more workers. For example, if you look at data from the Bureau of Labor statistics we're now 500,000 programmers short in the United States, which are great jobs that are not filled. In the next three years, that's going to grow to 1.4 million. That was certainly a big discussion point in Davos.

Will there be automation as RPA (Robotic Process Automation) starts to go at scale, so people who live in Cubeland and push paper to one another, such as in mortgage processing or claims processing, are you going to start to see automation hit jobs in those areas? I think people theoretically believe “Yes.” The extent to which ... is it going to be minor? Is it going to be significant? We don't know yet. I think people believe in that, but it's not happening as quickly as some alarmists are trying portray.

As an interesting aside on the relationship between automation and jobs, the societies that have experienced the highest levels of industrial automation – such as Japan, Germany and South Korea – also have the lowest unemployment levels. Why? Because when one automates, there is also associated innovation and growth. So, it’s yet to be seen if that will also occur with digital automation of white collar labor, but it’s an interesting precedent.

What we do know today, people can't get their hands on enough digital talent. So, if there is a crisis on either side of this jobs issue today, what's interesting is that the crisis is on the fact that we can't fill these roles. We've heard this again and again with clients just saying, "I need people who have these capabilities, and I can't find them quickly enough."

So that’s a summary of the conversations that focused on digital and employment. Regarding digital and its impact on our clients, four themes recurred:

a) How do I change the customer interface? This is something we've talked about for years, that there's the Sunday night - Monday morning phenomenon, by which a social computing experience on a FANG platform is so engaging on a Sunday evening, but then, say, a banking or work experience is so crummy by comparison on Monday morning. We heard that again and again. Clients would ask “As my customers keep looking at their smartphones 100, 200 times a day, how can I make my product just as engaging?” It's a set of new rules for customer engagement and intimacy, with one to one, the combination of physical and virtual, and all those attributes. The customer interface continues to be a big area for digital as clients realize the battleground is not just on products but also on customer experiences.

b) How do I build a smart product? How do I instrument things in my environment, whatever that may be? How do I build the smart place or the smart product by instrumenting things and then harvesting the data and turning it into new customer value propositions?

c) Very specific process areas for RPA and how can we get started? Which process areas make the most sense? Where have others been successful? And what tools, products and vendors can best get me there?

d) Taking advantage of heritage IT. A real understanding now ... it's from an IT perspective ... that IT for most of these firms, I'm speaking of 100 year old companies now, that that IT backbone was purpose built for a different area. It was built for moving and selling widgets, for an industrial business, which obviously gave rise to all the vendors you and I know extremely well, the SAPs and Oracles of the world. Now, nobody is being critical of those decisions because they were the right ones for the time, but now you've woken up, a lot of these firms will recognize it's all about the data. However, that data is trapped in legacy silos. How do they have data as their true north and have the ability to pull that together and manage it in the way that the FANG vendors can? It's not just getting their IT unit cost to an Amazon type unit cost. It's also, how do they view their data in the way that, for example, a Google can view their data?

If you were to bucket the conversations that you have with CEOs and digital, 80% of the conversations would land in one of those four buckets.

As a final point, I was part of a very thoughtful dinner conversation that focused on the intersection of Artificial Intelligence and cultural norms and values. For example, with health care records on artificial intelligence platforms, what do you do with them, and how far should we go? I won't give you the ins and outs of the conversation, but at a high level, Americans were saying, "We really have to keep that as private as possible because you can't have a situation where some individual is wronged by misuse of that information," with preexisting conditions, future insurability, so forth and so on. There were Europeans who were even more strident on that front because of the history that they've had in the 20th century. They pointed to initiatives such as “right to be forgotten” that will only need to be bolstered as AI becomes more prevalent. But then there were some Asians who had a very different view, essentially arguing, "Our view is a much more utilitarian one. We need to determine what's best for the 10,000 and not what's best for the individual." That gives you a completely different perspective. If you could improve the lives of the 10,000, and maybe a couple of unfortunate individual mistakes get made in the process, that may be the better approach. If you just get stuck by focusing on outliers of what could possibly happen with an individual, then you may not get the societal benefit quickly enough. The conversation continued down many other paths with many more examples and a good amount of vibrant, yet civil, argument. The point is that history taught us that in the third industrial revolution – with the advent of the internal combustion engine and assembly line – some societies advanced rapidly with it while others did not. It became clear, to me at least, we will likely have a similar economic lumpiness with the adoption of AI in the fourth industrial revolution.

Davos debrief – Part 1

It has become an annual ritual – I either talk to Malcolm Frank, EVP of Strategy and Marketing at Cognizant before or after the annual WEF event at Davos. This year it was after the event where he missed at least one dinner appointment due to heavier than usual snow but came back filled with even more memories. Here is part 1 of his comments:

I think that it was a very good WEF, very productive from our perspective, and of the years I've been going, was probably the most upbeat. I think that was pretty much a consensus view.  However, there was such confidence in the global economy that some people were wondering, “Does that even start to border on complacency?” After all, when most everybody starts thinking in one direction the opposite tends to occur. And recessions generally appear every eight to ten years, and it’s now been nearly ten years since the credit crisis. That said, this year’s Davos had a general sense of optimism.

Three themes transcended the week:

a) The first is the notion that businesses need to step up to be truly responsible members of their communities and society in general. The call for corporate purpose was prevalent - that each company should think of what is it contributes not just to its customers, shareholders and its employees, but to the broader communities in which it operates and serves. That a company needs to go above and beyond just delivering good results, but at risk of sounding trite, needs make the world a better place. And not in a general sense, but very specifically through what it sells and how its employees behave. That was a theme that was provided in formal panels and discussions and also ran through many informal discussions as well.

b) The second and, probably the most dominant theme, was around tech. If you had a dollar for every time you saw the word "digital" for the week, maybe you'd have $278 when you left. It was plastered most everywhere. There are lots of streams that go from this focus on digital. One stream is, I was really impressed by how CEOs are up to speed on technology - even specific technologies. They would ask: What is the art of the possible? What are my competitors doing? What works and what doesn't work at scale? The key is real use cases in their industry. There was an intense focus on that and a deep appreciation of what it takes to be successful.

That is a big shift as, in the last five years, digital has picked up enormous momentum. Five years ago there was just a general awareness of this as something important. The last few years, CEOs were getting educated on the topic. Now you see people taking action. When CEOs are looking at their own companies they ask, “How do I become a digital leader?” Digital is clearly a double-edged sword. If they do nothing, they can be victimized by it, but if they make sage and shrewd moves, they can really start to gain advantage. That was, I think, CEOs looking at their companies, what they thought of digital.

Another theme tying these first two together – of businesses acting responsibly in society and what's happening with technology - is an intense focus on the FANG vendors, and their impact on society. We've been in wonder about the growth and consumer adoption of these platforms for the past ten years. Now there's a lot more scrutiny, and that scrutiny is all around this general notion that this may be a vast social experiment that we're all on together, and we don't know where it's taking us. What does it do in terms of privacy? What does it do in terms of trust? What does it do in terms of sovereignty? These are big questions that are now being asked. Also, one theme that was coming through a lot was on societal norms and values, and that those tend to be embedded in these products. That there is an inherent Northern Californian social and ethical bias embedded in these products, and yet how do those play around the globe?

Richard Edelman presented the Edelman annual trust barometer. He was describing how trust had truly collapsed in several areas. It had collapsed in and with the United States. It had collapsed with the media as an entire sector. A common denominator in all of those was the role of social media. This is now having really, really big impact. People are starting to think through, “What do we do about it?” I could go in lots of different directions on that, but that was a big topic.

And there were not only questions on the societal impact of the FANG vendors, but also – more prosaically - their industry impact. If you look at the digital ad market, it's become a duopoly. The majority of US ads now online are either on Google or on Facebook. If you start to look at what's happening in the Cloud, we're starting to see similar concentration. Probably the most significant one is what's happening with mobile operating systems. It's between Android and iOS. That is, I think, now 99.7% of the market, just those two platforms. Of course, then, what goes through the platform of Google, the dominance that Facebook has in their space. There's, I think, real conversation on, is it healthy to have that level of industry concentration? Additionally, people are thinking through and starting to realize, it's not just about market share or revenue or market cap (which are more traditional industrial measures and constructs), but it's about data. How do we all feel when that much data is concentrated, and growing at radical rates, on individual platforms? That's now very much in the conversation.

c) The third topic is the health of the economy worldwide. The view was, things are pretty good. Around the world, by and large, you get this parallel growth of societies and large economies firing on all cylinders. China continues with this strength. India has sustainable momentum. The euro zone, surprisingly, is doing very well. Japan is healing. Then the US is probably as strong as it's ever been.

In fact, the optimism of US CEOs was the highest, I think, in the history or measurement at Davos, certainly the highest in recent memory. US CEOs are quite excited about the economy, but that was not just in the US. That sentiment was fairly broadly held, I would state, with the exception of the UK. Real concern post-Brexit.

In the context of this economic optimism, there is still a view that there are a lot of things up for grabs right now. In the language of the west, we're leaving the third industrial revolution, and we're going into the fourth industrial revolution. In that context, there's a real need for leadership across governments and corporations.

There are some very important issues that need to be thoughtfully guided and determined. In the same way that America had an important voice through the 20th century, in those times, it needs to continue to have an important voice in the 21st century. Many at Davos openly spoke about that... this longing for continued American engagement as this new digital economy unfolds.

That said, I heard several times where people were tying this back to social media and trust. You can draw a straight line through recent political events ... You look at what happened in France. They went from a left-leaning government to a young centrist who had zero governmental experience. The UK had the Brexit. The US had Trump. In all three cases – whether people like it or not - the majority of voters said “Something completely new and unknown is better than what we currently have.” A lot of that is a manifestation of this shift, that too many people are being left behind in this transition from the third economy to the fourth. It's creating alienation and disenfranchisement. We're going through this lumpiness in economic shifts, where some gain but far too many are being left behind, and we need real leadership during that time. I think that's how people were defining it. And it requires true leadership, those who look beyond their turf battles or supporters, and establish a vision for all of society.

GE and Digital Transformations: Don’t jump to conclusions

It’s open season on GE. BusinessWeek has a cover article and calls it an “astonishing mess”. Competitors are gloating they are getting GE resumes in droves. My friend Brian Sommer recently tweeted “3 1/2 yrs. ago, I gave a copy of GEs annual report to an accounting professor. I asked if his grad students could pierce the veil of the myriad special purpose entities within it. When financial statements are this opaque, what is being hidden?”

Worst of all, I am starting to hear consultants tell clients – Don’t attempt Big D – Digital Transformations. Do something safe – may be accounting in the cloud, get adept at digital marketing. Don’t be like GE.

I think that is poor advice, at least when it comes to digital transformations.

Read the BusinessWeek article and GE’s woes come from a series of poor acquisitions – Telemundo in entertainment, Abersham in pharma, WMC Mortgage, Edwards Systems in building security, Dresser and  Lufkin in oil and gas, Alstom in power. That section in the article describing nearly $ 40 bn in acquisitions is titled “Big Dreams, Small Returns”

Then there is the drag of GE Capital, which almost took the company under in the Deep Recession. The company continues to pay the price for its (over) exposure to financial services sectors.

About GE Digital, it was over hyped but did anyone realistically expect to become truly significant, like 20-30% of revenues in a couple of years?

The real power of GE’s digital efforts comes from the fact that it makes the locomotives, turbines, aircraft engines, MRI scanners, blowout preventers and has started to embed them with technology. And that it has deep domain knowledge in the sectors where these products are used. And it is willing to price based on performance not just traditional product pricing.

It opened our eyes to rethinking four aspects of business – asset management, field service, product design and business models.

People have tried sensory networks for a while. BP had them in its refineries and on tankers for a decade – I wrote about them in The New Polymath. Railroads have had sound and vibration sensors on tracks to monitor wheel noise and detect impaired ball bearings and other flaws before they become catastrophic.

GE’s broad Industrial Internet vision showed us assets – especially big, complex ones can talk to us and tell us when they need help. Asset management is no longer just about depreciation accounting and scheduled maintenance. It is about predictive maintenance and better lifecycle management. It has led to a new category of companies – Uptake, C3 and others which are helping customers mine IoT data. Field Service is now about tracking and servicing these assets in the wild. Last year, the fastest growing job in the US was that of wind turbine technician. The constraint today is networks – wait till communications improve and we can get realtime data from planes in the sky, from rigs in obscure places. Product design has evolved dramatically in the last few years. Any product which is not embedding sensors, software, antennas is likely passe. When I started to write The New Technology Elite I thought about 15 sectors – automobiles, medical devices etc. were embedding technology in product and services. The book ended up with examples from over 75 industries. Finally there is the business model change – we increasingly expect to buy outcomes and experiences, not products and services.

Go ahead and malign GE. Short its stock. But don’t ignore what it has shown us as possible when it comes to Big D. If you get timid and go with small d projects you will make the same mistake so many companies made in the 90s. Instead of proper process reengineering we took the easy way out – so called best practices embedded in packaged software. We ended up with massive overruns, bloated costs but not much better processes. With small d, yes you will feel good about being in the cloud, but your products, field service and business models will not have evolved.

Automation, “Superworkers”, ERP and CRM

I recently did a podcast with Ton Dobbe. I have know Ton for a long time in various roles at Unit4. He always impressed me with his work with organizations around the world around topics such as accelerating business change, fighting business disruption, boosting operational efficiency and adopting digital transformation.

He recently started his own consulting firm, Value Inspiration and invited me to talk about themes from Silicon Collar and how automation is helping make all of us much more productive workers and how ERP, CRM and other business software vendors should be thinking about machines and their impact on business processes.

Here is the podcast – we cover wide ground about automation and digital transformation in many industries. Ton is a very positive, optimistic person and the half an hour flies pretty quickly.

Smarter Immigration

President Trump spent plenty of time on immigration in his State of the Union speech this week. I wish he had spent more time on each of the four pillars he identified and two policy changes he announced – we will move to more talent based immigration, and our reunification visas will focus on the nuclear family. Instead he spent way too much time on the MS-13 gang, the Wall and DACA. I am an immigrant myself and track the job and automation market as a technology analyst and I felt like Rip Van Winkle who wakes up from a long slumber to find a changed world with new terminology. I hope he has a follow-up speech on more substantive immigration matters. And that there he also praises the contributions immigrants have made to this country, like the fact that the majority of US Nobel Prize winners the last couple of years have been immigrants.

In contrast I see equally wild talk on the other side. Like the claim that ALL of those Nobel Prize winners above were immigrants. They were not, starting with Bob Dylan. I also see so many who keep quoting the words of Emma Lazarus on the Statue of Liberty “Give me your tired, your poor…Your huddled masses yearning to breathe free….” That’s noble, but our immigrants don’t come on boats anymore. They are entering the workplace with digital calipers on the shop floor, Eagleview and drone technology in the roofing industry and cognitive computing in audit projects. In my recent book on automation, I profiled how machines are transforming every job. I concluded “we are no longer white, blue or brown collar workers – we are all Silicon Collar workers since technology is reshaping all our workplaces”.

Several areas where our immigration needs to reflect the new century:

Our immigration is increasingly disconnected from our labor market

Every month, the Bureau of Labor Statistics reports on the state of the job economy. Month after month, for years now, the number of job openings has exceeded 5 million, mostly in trade and blue collar areas. In contrast, we have been producing too many white collar graduates who are struggling to pay off $ 1.5 trillion in student loans. Yet, we have been taking in nearly 3 million (my estimate) immigrants and guest workers a year and I don’t see a pattern to suggest that inflow is aligned with the shortages and surpluses in the incumbent workforce.

We have too many confusing immigration “lanes”

The 3 million a year arrive here through a dizzying array of (over 200) preferences and visas – and many do with no formal paperwork. There is the F1 direct immigrant preference for unmarried sons and daughters of U.S. citizens, and their minor children. Not to be confused with the F-1 Student Visa which has restrictions on when and where you can work. Many F-1 visas get converted to immigrant visas when their employers hire them after graduation. Many of these lanes have not been well monitored. The H1-B visa, the so-called “Genius Visa”, was originally meant for highly specialized skills, PhDs in Astrophysics and such but they mostly got used for much more mainstream software developers. There has been so much abuse of the spousal visa that Congress had to add a specific section about it to the Immigration and Naturalization Act. Then there are diversity lottery and investor visas. And yet in spite of all these lanes, we have in addition millions of undocumented workers.  We need a ruthless rationalization of these lanes – with the goal of  a smaller yet as productive set of immigrants.

We don’t assimilate our immigrants well

If you decide to apply for US citizenship  (immigrants have to wait years to qualify and many stay as “green card” holders before they can apply and many choose not to) you go through a naturalization interview which tests you on English, U.S. history and civics. We should front-end this scrutiny to everyone when they arrive in the US not wait for years till they decide to apply for citizenship. It is disheartening how many do not speak or understand English. Others do not agree with our Constitution or the Amendments. Still others do not have an understanding of our history or our diversity. You should be willing to accept that our country has Hassidic Jews, Mormons and Sikhs among many others. You should be willing to go through our security vetting. Assimilation is a much bigger issue but we need to start by better qualifying our immigrants.     

We should expect more from our global partners

As we rethink immigration, we are already getting pummeled around the world. There is no reason for us to feel guilty – over the last couple of decades we have taken in more immigrants and guest workers than all the other rich countries put together. Over the last couple of centuries, our record is even more impressive. I think we have more than earned our right to ask for partners to step up. There is no reason the Syrian refugees should not have ended up in neighboring affluent Arab countries. Religion, culture, cuisine, weather, proximity all pointed to that solution versus a long trek to Germany. Kudos to Germany for stepping up in that instance but we should ask it why it keeps running up trade surpluses year after year. More trade balance would create plenty of jobs elsewhere and stem some of the labor flow. Japan has an aging population, and low birth rate. Cultural objections aside, immigration should be part of the menu there. We always seem to tip toe around that. Countries which have historically sent us lots of labor – Ireland, Philippines, India, China, others – we should ask for some reciprocity. Allow many of our young workers to go there. Sensitive discussions, but absolutely needed as we go forward.

We are a country of immigrants. Immigration should be our core competence. We have allowed that to fray. We got to this mess over decades and it will not change overnight on its own. Let’s do it smart, not out of hostility or out of guilt. Let’s make it a world-class process in line with our world-class economy.