OwenBloggers: Sam - MBA 2008

HBS cases I'd like to see - the AAPL NDA

In part three on an ongoing series, we take a look at one of my favorite companies, the almighty Apple...

Launched just last month, the iPhone 3G has already sold over 3MM units. Taking advantage of the "computer in the palm of your hand" concept, Apple has opened up the platform for development by 3rd party software companies. Current favorites include Twitterific, Facebook, Google, and a whole host of other applications sold exclusively through the iTunes store in the hopes of presenting a seemless and integrated user experience.

Or is it?

There has been much discussion around the blogosphere about the Nondisclosure agreement (NDA) that goes with becoming an iPhone developer. You see, the only way to get your application onto the iPhone is through iTunes, and the only way into iTunes is through Apple. In order to do that, a developer has to be certified by Apple, a process that involves, amongst other things, signing an NDA that severely restricts the developers' ability to discuss anything iPhone related with basically anyone anywhere.

As I understand it, NDA's preventing developers from disclosing details to the public aren't that uncommon, but ones limiting access to their peers are. By imposing these restrictions, which are effectively the price of entry, Apple is limiting the developer community's ability to help each other troubleshoot and offer other forms of support. Which in turn slows down the development/revision cycle and pretty much guarantees a crappy 1.0 product (the NDA also precludes beta testing).

All this from a company that's notorious for their secrecy and "proprietariness," so much so that there are those that say that it's the sole reason that APPL and MSFT aren't revered in scale and scope.

This one feels like a job for Dave Dilts, Oh He of Strategic Management of Technology. Some of the things I'd like to see discussed include:

• AAPL is a relatively small (but growing) fish in the Koi pond of personal computers. But when talking about the iPhone, are they a computer company, a phone company, or something else entirely?
• No help with debugging, troubleshooting, or beta testing means inherently less stable products. Are program crashes blamed on the software or on the iPhone in general? Are you more likely to hear "#$%^& Facebook crashed on me again," or "#$%^& iPhone, why doesn't it 'Just Work'?" What are the long term implications of that for AAPL?
• Developing for Windows or the web represents a larger market than developing for the Mac. At what point does AAPL start to worry about alienating all their outside developers? Or is that their strategy, to make sure all the toys are their own?
• If this is a case of "His Steveness" being his oft-referred micromanagerial self, at what point does the company start feeling hamstrung by that attitude? How does the Pepsi Incident factor in to that decision?

[Photo credit: Chris Radcliff via Flickr]

HBS Case I'd like to see - MFST and YHOO

In part two of the series, we look at the attempted MSFT takeover bid for YHOO.

According to the bloggerati, MSFT's take-over bid for YHOO stemmed from their desire to shore up strategic holes in the online search area, specifically tied to search-based advertising revenues (currently dominated by GOOG). Whatever the real reason, Chief Yahoo (his real title, if the ads are to be believed) Jerry Yang responded with a resounding "Ummm, yeah ... I don't think so." A subsequent proxy "fight" involving the never-good-news-when-he-gets-involved Carl Icahn and a week of Ross and Rachel style will-they-won't-they guessing led to MSFT's abandonment of the negotiating table followed by YHOO's utter lack of a public response. And while it seems that this might be best served as a finance case, I'm again thinking strategy and would love to read discussions about:

 
• What were the real reasons behind rejecting the buyout offer?
 
• Who made that decision? Was it Yang? Was it the Board? Was it both?
 
• How much was communicated to the employees during the talks? Who made those decisions?
 
• When Icahn got involved, how did the strategy change? Or did it not change?
 
• Rejecting the buy-out suggests that YHOO thinks their long term strategy is more profitable than the buy-out. What is that plan?

[Photo credit xenolon via Flickr]

HBS case I'd like to see - the Netflix meltdown

Your thoughts on their relative effectiveness aside, its hard to deny that the case study is a staple of the MBA diet. From Erik-with-a-"K" Peterson in first mod's LTO to Wal-Mart in mod 3's Core Strategy, stopping briefly in mod 2 to visit with Arthur Dief as well as the gang at Southwest Airlines during Core Operations, my first year at Owen saw a significant number of hours devoted to pouring over the pages of the all-too-familiar classpack, highlighter in hand and Excel standing at the ready. Add to that the hours spent discussing, writing, polishing, and paring down to fit inside the sometimes-questionably-low word limit, and its fairly safe to say that the case study represented a significant portion of our lives at the Owen School.

Now that I'm out and in "the real world," a handful of recent events have me wondering what would appear in the pages of the HBS case if there were a HBS case written about them. Over the course of the next few posts I'm going to explore a few of those stories.

Netflix's August meltdown

Like a lot of people, my wife and I subscribe to Netflix. The combination of easy online tools, no late fees, and set-and-forget movie rentals appeals to both of us. In fact, we spend less on Netflix than we did in late fees at Blockbuster, which in itself translates to an incredible amount of value for us. Just last week Netflix found itself in crisis mode. Its normally storied operations went dark for 3-4 days. And while the details haven't yet been forthcoming, what we do know is that the "outage" affected nearly 50% of its distribution centers. As it turned out, operations were restored by the end of the week. In a show of good faith, Netflix has offered to refund 15% of the monthly charge to those affected. Not being familiar with Netflix's books, I can't say how that will impact their bottom line for the quarter/year, but I'm thinking it might be recouped in customer goodwill.

Some of the questions I'd like covered in the case include:

• What happened and how was it fixed?
• What were the disaster recovery plans in place?
• How was the decision made to pull the plug?
• How were the decisions made to inform the public?
• Who was on the crisis management team? How were they organized? And how was the team built for nimbleness?
• What discussions went on around the decision to compensate those customers affected by the outage?

This one feels like a Core Strategy case to me, perhaps written by the Dynamic Duo of Deans (are they still teaching Core Strategy?).
Up next, the second part of the series: YHOO and MSFT: the take-over wars.

[Photo Credit super-structure via Flickr]

Death by Powerpoint

Given the sheer tonnage of PowerPoints I've found myself wading though recently, I thought I'd share a bit of comic relief poking fun at that all-too familiar presentation tool.
Enjoy.

Stretch Management

 

The leadership of General Electric introduced the management concept of "stretch" in the 1990s. The idea was not just to create extraordinary goals higher than those thought achievable for the coming year. It was to set outlandish, almost unthinkable goals that business groups might achieve in the longer-run.

Has the Time Come for "Stretch" in Management? — HBS Working Knowledge

Topicality and timeliness are funny things. No sooner had I returned from two weeks of GE Corporate Training than this piece appears in the pages of HBS Working Knowledge. The ever-so-slightly ironic thing is that one of the major themes running through training was the idea of the stretch goal.

In the paper, Professor Heskett describes the idea of a stretch goal on the corporate level. Put simply, rather than setting quarterly or yearly targets, management sets longer term goals and then intermittently measures progress towards them. So, for example, rather than looking for a 5% reduction of cost in the coming 12 months, management sets a goal of 15% reduction over 5 years. And its relatively ease to see the relative merits in a) effectively communicating the Big Picture Vision to the entire organization and b) giving the organization a rallying cry.

When put to my class of ECLPs at training, the concept of a stretch goal was framed slightly differently. Rather than being a variation of the ever popular "Where do you see yourself in 5/10/15 years?" - which, I'm sure Susan will agree, is a valuable tool to use in charting your career trajectory - the stretch goal was put to us as one of personal development: on what do you need to work to get you to the next level of your career. One hint would be that DCF's, cost accounting, or figuring out how to work the office printer are a bit too narrowly defined. Another hint would be that everyone needs stretch goals.

How Starbucks' Growth Destroyed Brand Value - John Quelch

How Starbucks' Growth Destroyed Brand Value - John Quelch

But none of these moves addressed the fundamental problem: Starbucks is a mass brand attempting to command a premium price for an experience that is no longer special. Either you have to cut price (and that implies a commensurate cut in the cost structure) or you have to cut distribution to restore the exclusivity of the brand. Expect the 600 store closings to be the first of a series of downsizing announcements. Sometimes, in the world of marketing, less is more.

By now I'm sure everyone has heard the news that Starbucks plans on closing some 600 of its stores. While many analyses (including Business Week, The New York Times, and the Financial Times) have delved into the financial and economic implications of this move, none have ventured too far into the brand implications of Starbucks' recent exponential expansion and subsequent pull-back.

John Quelch of the Harvard Business School takes a look at how the expansion of product lines diluted the "brand equity" and alienated the early adopters. And while its true that a company must grow and evolve, its also true that there has to be some good balance between growth and remembering those who got you there.

I wonder what Mr. Quelch (or the Owen School's very own David Dilts, for that matter) would say about the recent iPhone 2.0 announcements from Apple and AT&T?

Full Circle

Just under 2 years ago I had the good fortune of being introduced, through the wonder that is Owen Orientation, to 8 of the coolest people. Introduced via Consuela-mail (no, that's not the official term, but I'd like to see it *become* the official term) in the middle of the summer, our first official meeting was a tentative and semi-awkward Coffee Talk at the local Starbucks with 9 people trying to figure out exactly how the dynamic was going to work.

Being brand new business school students, our first collaboration was, of course, a major motion picture production (The VUsual Suspects, which is a story in and of itself). Over the weeks and months that followed we made our way through discounted cash flows, the black tie only "Midterm Celebratory Experience," "factories brew!!," little dogs in funny hats, broken legs, new career goals, "Real Men of Genius," starting and growing a blog, new marriages, new relationships, old relationships, kids, and the wonder that is Froebenomics.

And now as the curtain begins to fall on our time here at the Owen School, Miss Kathleen made the wonderful suggestion of getting the band back together for one last hurrah. Last night, as our waiter Mark kept "firing" the family style dishes, we got together, shared a drink, and enjoyed each others' company for another night.

For those of you out there who are skeptical about all the claims of culture and community repeated by members of the Owen Family, I'd ask you to simply consider this: two years later we all bent over backwards to make it to dinner. One person drove 5 hours after closing on a house, one cut a trip short, another boarded a plane at 7 in the morning, and Isaac actually left work early.

Our travels here at the Owen School didn't always take us in the same direction, but in the end it turns out that we still went through them together.

Sappy, yes. But also true.

Is 41 points considered a rout? A shellacking? Or just plain old gettin' schooled?

Oh.

My.
God.

I don't really know what else to say except that that was one of the best Vanderbilt basketball games that I've ever attended.  Neltner was on fire, equally effective on both sides of the court.  He was making plays underneath, he was shooting from the outside, he even got a couple steals in the first half.  Shan Foster missed only 2 shots all night, with the first one coming deep in the second half.

That's 4 in a row for the boys, 2 of which were on the road.  This gives us some much needed momentum going into the Florida game this Saturday afternoon (2pm CST).

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No trees were harmed in the writing of this post.

The other day I got "looped into" an email conversation that was somewhat tangentially related to an ongoing project in one of my classes.  For me, getting CC'd on the 15th email of the chain has always felt a little like walking into a room full of laughing people - you don't exactly know what's going on but you really hope they're not laughing at you.

As I dug through the impossibly long email chain, I ran across an email signature that just made me laugh.  No, it wasn't one with a joke or a cool quote; rather, it was one of those "this email is privileged information and we will come for you in the middle of the night if you cross us" email signatures.  You know, the ones typically appended to the bottom of emails from lawyers and/or consultants.  The ones that are attached to UNencrypted emails ...

This morning as I avoided doing actual work (also known as cruising the RSS feeds), I ran across a post by Mike Arrington at TechCrunch in which he ... expresses his displeasure ... with the "Please don't print this email" signature that's all the rage these days.  And while I don't share Mike's level of distaste for those signatures, I do, from time to time, question their effectiveness.  I sometimes wonder how many people have said, "Well, since you asked nicely, I guess just the once I'll skip printing it out!!"

Now, back to avoiding doing real work ...

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Overheard this morning

MBA #1:  Actually, my goal is to be in a Harvard Business School case study.

MBA #2:  But a good one, right?

MBA #1:  No.  A bad one.  (pause)  I want to be Eric Peterson.

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