Impact on Internet Companies:

• Investments without a foreseeable ROI will end
  Sequoia’s recently leaked RIP presentation to their portfolio of companies makes this point very clear for privately funded startups. Companies without a business model will not receive subsequent rounds of funding as there is a fixed amount of money left in the funds which invested in startups today–and it must last longer than previously expected as exits will be more difficult. Public companies are already under substantial pressure to reduce expenses inline with reduced top-line revenue growth (e.g. EBAY) and they’re most like to do that with questionable ROI investments and projects.
• Expense reductions impact on overall wages
  These reductions should cause an overall contraction in the job market which will be reflected on all jobs including “product” and “design” jobs as most company’s approach a reduction in force in an across the board manor. This will also cause downward pressure on wages as more and more people will be looking for work perhaps equalizing what’s been an “employee’s market” in the design field for nearly a decade.
• Backlash against outsourcing
  Reduced wages and a devalued dollar will create incentives for companies to hire locally in America. Furthermore, politicians will gain favor thru protectionist measures and may make it more difficult for companies to outsource jobs abroad. This will likely lead to a contraction in the outsourcing practice at least for US-based companies. Also some companies may focus on fewer, higher performing employees than lots of low costs employees (as Mike Spieser suggests).
• Internet companies will begin to operate like “normal” companies
  This means a renewed focus on operational efficiency, profitability, and paying customers. Many firms may prioritize low-beta profitable investments over high-growth but longer-term investments. For startups focused on a long-term growth strategy it’ll be important to find a way to survive smaller and harder to get rounds of funding.

The role of Product Management and Design

The reality is now more than ever, businesses cannot afford to lose a ton of money on failed launches. When things were booming engineers could build solutions in search for problems–and some would stick and succeed.

In this environment the best way to mitigate risk is to rely on seasoned product folks to identify real customer pain points and then design a product that effectively meets those needs. Thru effective portfolio management you’ll also be able to evaluate your investment at several stages in order to mitigate risk. In that way you’ll be much more likely to succeed with the features and products your company launches.

Recommendations to Read:

• Two helpful posts from Brad Feld: Let’s Get Pratical and
  OK Entrepreneurs, Time to Step Up
• Jason Calacanis on The Startup Depression
• Ali Velshi from CNN explains the Economic Crisis on Oprah in simple terms

PDF: Leading Innovation Strategy and Process in Firms (1MB)

At a high level he’s created a number of frameworks for approaching visualizations (e.g. sketches, charts). Here’s one that I find particularly useful in my day-to-day work:

1. Look - Collect and scan your data. Decide what problem you’re trying to solve.
2. See - Find patterns in the data (Who? What? When? How? Why?)
3. Imagine – Describe your data by capturing it your “mind’s eye”.
4. Show – Select the right framework (e.g. Measurement? Time line?)

Dan’s getting a lot of coverage in the press. Here’s some:

• BusinessWeek: Doodling for Profits (Feb 20th)
• Microsoft MIX Conference (Mar5th, Video 75min)
• SXSW Conference (Mar 8th)
• An interview with Kai Rysdall on the “Marketplace” radio program (podcast)
• A feature article in the April issue of FAST COMPANY magazine (article)

At the core he speaks about how companies have three ways to create a long term strategic competitive advantage: strategic M&A, operational excellence, and organic growth. It’s the last of these three that design forms the cornerstone of success for he said “Design is the skill of identifying and creating value”.

Given that design is the key to organic growth, he went on to discuss what makes a great experience and introduced the following framework:

At the most basic levels, a product or service may simply fill a need. For example, perhaps I need to buy some salt (economic need) so that I can add it to some cookies I’m making (functional need). However for a brand to become truly meaningful it must create a meaningful experience. Perhaps using Morton brand salt to help me bake cookies with my son would evoke memories of baking with my mom growing up–a meaningful experience.

I think Darrel and others evangelizing creating customer experience through the design process are right on. The companies that embrace this thinking will do well in an age where meaningful experiences create loyal customers (and thus value for shareholders).

This fall one of my courses at Haas will focus on design and how as leaders we can leverage it as the key to innovation and growth. I look forward to learning more and sharing it here on this blog as well as my thoughts on the Making Meaning book which I just ordered.

• Documenting & Advocating User Experience — Yeah, not so much. Generic ROI arguments tend to be received as voodoo. Most agreed that sharing specific project successes was more successful, “The proof is in the pudding!” as Jeremy said. Only distention is early on to define the role of group in order to fit into the overall process. We should also avoid talking about work as a “black box” but work as a collaborative force within the org. I couldn’t agree more that we simply must deliver and the rest will take care of itself.
• UX Owning User Experience – Early on yes, but later no. Jeremy emphatically stated that everyone is responsible for quality of which UX is a part. Justin mentioned how now at eBay, the entire company is involved in defining what the customer experience should be. Richard referred to his thoughts on owning design and also referenced a quote from Forrester in Jan 07, “Treat customer experience as a competence, not a function. Delivering great customer experiences isn’t something that a small group of people can do on their own — everyone in the company needs to be fully engaged in the effort.“
• Organizational Design – More important to understand how you fit in and how to best maximize it. Executive sponsorship who can involve you in the right discussions and decisions. In my experience having an advocate on Exec Staff can make or break your org’s role–you’re either involved in the inital conversations, or not.
• Ethnographic Research – YES! Gets you executive access, builds credibility, and has a multi-year shelf life. Ridealongs and use of video is key as it gives the research credibility. We introduced these about 18 months ago at eBay and have seen it work quite effectively in focusing the organization more around customer issues and positioned our User Experience team to help solve it.

Richard also typed up some his thoughts on Moving UX into a Position of Corporate Influence [PDF].

Six Styles of Leadership:

• Coercive (aka Directive) – Demands immediate compliance (telling)
• Authoritative (aka Visionary) – Mobilizes people toward a vision (selling)
• Affiliative - Creates harmony and builds emotional bonds (relationships)
• Democratic - Building commitment thru participation (consensus)
• Pacesetting – Sets high standards for performance (showing)
• Coaching - Developing people for the future (supporting)

I think it is important to understand which style is most important given the situation as well as where the organization is in its development (more on this later).

Want to learn more?

• Article: Leadership that Gets Results [$] (Goleman, HBR 2000)
• Book: Primal Leadership (Goleman, 2004 Edition)
• Consultant: Ryan Lahit of OrgLeader, LLC
• Previous blog post of mine: Emotional Intelligence

The combination of a small class, exceptional faculty, and a collegial atmosphere impressed students. Recruiters, meanwhile, were wowed by the quality of the grads.

It’s great to have the outside validation of what I consider to be a great program. On a related note, I’m flattered to be featured in the school’s brochure this year.

Not only is Dan Roam perhaps the best visualizer of a generation but he’s reflected on how he approaches his work so that others can repeat it. Here’s how he approaches it:

1. Look - Collect and scan your data. Decide what problem you’re trying to solve.
2. See - Find patterns in the data (Who? What? When? How? Why?)
3. Imagine – Describe your data by capturing it your “mind’s eye”.
4. Show – Select the right framework (e.g. Measurement? Time line?)

Dan discusses the importance of identifying patterns in your data and then finding ways to communicate those patterns to others. As I’m finding in other business literature no matter what the field effective pattern recognition and communication seems to separate the best from the average.

Examples:

• Measurement: Comparing using Harvey Balls is a classic approach. Focus on simplicity (simple 2d colors vs. fancy 3d charts) to put the data front an center.
• Flow chart: Dan’s got a great example of Walmart Sustainability on his blog.

If you’d like to learn more about visual thinking check out Dan’s blog and stay tuned for the release of his book The Back of the Napkin. Finally, I highly recommend his training workshop. I took the 1/2 day visual thinking workshop and left wanting more.

Update:

• Dan’s posted a chapter of a potential upcoming book The Million Dollar Chart.
• A company now sells interesting visualization posters: HistoryShots

The annual ranking results from polls of corporate recruiters rating M.B.A. programs on 21 criteria, including things like students’ problem-solving skills, the likelihood of finding “stars” at the schools, content of the school’s core curriculum and commitment to corporate responsibility.

The faculty and students have worked hard over the past few years to drive this ranking up and I’m so proud to be a part of the program.

Update: The WSJ’s latest ranking for 2007 moved Berkeley up to #2 .