With $80B revenue but a streak of 21 consecutive quarters of declining revenue, IBM has a big appetite for growth. The hungry of growth drives IBM investing billions into their AI business, namely IBM Watson Group. However, it also drives IBM away from a disruptive innovation even though it is in her own hand. The disruptive innovation in spotlight is Watson for Oncology. Continue reading
It is an open secret how hard to kill projects in development. In the Harvard Business Review article “Why Bad Projects Are So Hard to Kill“, professor Isabelle Royer says that many projects are hard to kill because of a “fervent and widespread belief among managers in the inevitability of their projects’s ultimate success.” The desire to believe in something is primal. The excitement and exuberance associated with a project typically originate with the project champion, whose unyielding conviction that the project will succeed is often based on a hunch rather than on strong evidence. The champion’s exuberance spreads because others also want to believe, especially if the champion is charismatic and well networked within the company. Continue reading
|Money Movement||$1.7 trillion||$354 billion|
|Revenue||$12.21 billion||$11.27 billion|
|Profit||$1.75 billion||$1.42 billion|
|Market Cap||$43.3 billion||$59.7 billion|
- ADP revenue includes full HCM services besides payroll.
Notice something here? ADP moves a lot of money than Paypal, but makes less revenue on money movement (less the revenue from other HCM services). It has a smaller market cap too. Why? Well, ADP is in the business of solution shop and value add process while Paypal is a facilitated network. Continue reading
In the theory of disruptive innovation, Clayton Christensen argues that the incumbent companies introduce new and improved products year-by-year with the sustaining innovations, which eventually overshoot the performance that some customers can use because companies innovate faster than customers’ lives change. Overshooting creates opportunities for firms to change the basis of competition in order to earn above-average profits. After functionality and reliability have become goo enough, for example, the next competition dimensions could be convenience, customization, and price, etc. Continue reading
In his book Misbehaving, Richard H. Thaler tells an interesting story. In a class on decision-making to a group of executives from a company in the print media industry, Thaler puts the executives to a scenario: Suppose you were offered an investment opportunity for your division that will yield one of two payoffs. After the investment is made, there is a 50% chance it will make a profit of $2 million, and a 50% chance it will lose $1 million. When Thaler asked who would take on this project, only three of twenty-three executives would do it. Then he asked the CEO how many of the projects would he want to undertake (suppose all projects were independent, that is the success of one was unrelated to others), the answer is all of them! Continue reading
A lot of brain power and money have been poured into FinTech, especially lending and payment areas. These are indeed exciting areas with new business models and technologies. On the other hand, people rarely associate the sexy FinTech with payroll services. Although it may sound boring, payroll is actually an overlooked gold mine for innovators. Traditionally, payroll service companies make money by service fees. New HCM service companies such as Zenefits work as insurance brokers while providing free payroll and HR services. But if we lean under the hood and look at the process, there is an interesting opportunity. Continue reading
Legendary former Intel CEO Andy Grove left us recently. Wearing many hats, he is an entrepreneur, a teacher, a writer, a philanthropist, etc. As Marc Andreessen says on Twitter, he is “the best company builder Silicon Valley has ever seen, and likely will ever see“. Even after more than thirty years, his book “High Output Management” is still a must-read for all middle level managers.
In his another best-seller book, “Only the Paranoid Survive“, he introduced the concepts such as “strategic inflection point” and “strategic dissonance”, which have become part of the lexicon both in academia and in practice. A strategic inflection point is a time in the life of business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.
Andy Grove steered Intel through several strategic inflection points, for example, the shift from the memory business to microprocessors when they realized they couldn’t keep up with Japanese competition. Soon Intel will face another inflection point. Actually this new inflection point already started. Unfortunately, Intel doesn’t have Andy Grove any longer. Continue reading
It is right, you don’t read the title wrong. In most people’s mind, Hadoop was almost a synonym of Big Data. Adding the magic word to your resume means more opportunities and higher pay. How possible is its future misty? Let’s get things clear together. Continue reading
Professor Clayton Christensen’s theory of disruptive innovation has been enjoying a huge success on examining low-end disruptions and new-market disruptions. But it had recently met difficulties to explaining high-end disruptions such as iPhone and Tesla. In fact, technologies that starts from high-end market and then reaches mainstream market are not new. Thomas Edison did it more than 100 years ago.
So did only the rich (and cow boys/girls) ride the horses after Henry Ford invented the Model T. Today, Elon Musk does it again!
Tomorrow, only few can afford driving a car when self driving cars take the mainstream market.
The Sharing Economy is now touching on nearly every aspect of everyday life. Besides the skyrocketing valuations, people also talk things like:
- Uber, the world’s largest taxi company, owns no vehicles.
- AirBnB, the world’s largest accommodation provider, owns no real estate.
It is true that AirBnB doesn’t own a single room. But most hotels don’t own real estate either! They lease. Continue reading