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Lessons from Facebook: It's All in the Measures

Today is the day that the first group of Facebook "lock-up" shares, post-IPO, go on the market. The analysts (in all their always fascinating wisdom - and, yes, I'm being sarcastic) told us it would be a bloodbath from the moment the markets opened. Then they told us that we wouldn't know for a day and a half. Then they said it was already accounted for because everyone knew it was going to happen. Then they said it's really November - when the next, much larger, tranche of shares are unlocked - that anything is really going to happen.

What all of this tells you is that - pretty much always - you shouldn't listen to the people who are measuring your organization as outsiders. They don't know your business. You do.

The question is: what do you know...and how do you make the best use of it and other measures you need?  Here's the answer.
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The expression "You manage what you measure" is not only true, it directly impacts the way you run your business in the short and long term.

Let's use Facebook as an example. At the time of this writing, the company has over 955 million users worldwide - nearly half of whom use the service each day. And in the company's early days, big user numbers was exactly what they needed - so that's what they measured.

But now, it's not about the number of users. It's about how the users use the site. Because to succeed in the long-term the company needs to convert those users - on their and their advertisers' behalf - into sales.

What does this have to do with you? Everything. Because just as Facebook is actively redefining what's important in their measurement systems - based on data they have and data they need - you need to do the same.

Now you may be saying, "Oh, that's Facebook. They're big and they're a technology company. We're different."

Sorry, but no, you're not. In fact, every company in every industry that has succeeded or successfully pulled itself up - whether out of bad economic cycles or complete changes in the competitive landscape - always does so through their measures.

Because you manage what you measure.

The way you want to think about this is as a form of executive and management creativity. That you and your team are going to move away from the measurement equivalent of "[we/our industry] have always done it that way" and recognize that there's rich information that you're collecting - and that you're not.

Start by asking:
  • What measures and opportunities are we looking at - because we're used to them - and, as a result, missing others?
  • Do our current measures give us the information we need to understand both existing and emerging markets - local, domestic and global...in and out of our expected sector?
  • Do we have measures that combine real-time (i.e., process), predictive (i.e., strategic) and alternative (i.e., soft) as well as results (i.e., backward looking)?
As you expand your measures, so, too, will you expand your success.


Can Sony Win Again?

There's a great video report by Reuters on how Sony lost its cool.  The question is: Can it get it back again?

The short answer is: Yes.

This is the dilemma of every company that focuses on "quality" and then commoditizes it into nothing.  That's what happened at Sony.  They lost their focus on creating exquisite, innovative products with an exquisite user experience and went for speed-to-market instead.

This was a multi-faceted mistake.

  • First, for those who trusted the Sony brand, the company has as good as lost that trust - and it's WAY harder to regain trust than it is to establish it.
  • Second, for those who didn't know the brand - most importantly, the young consumer - all they know is that Sony doesn't cut it in experience or innovation.
  • Third, even while they were cutting their quality to near nothing, they kept their prices high.

What that left them with was a company that doesn't produce anything consumers can be excited about buying at too high a price to want to pay for it anyway.

Real good strategy, Sir Howard.

The good news is, the company is going back into the hands of the Japanese.  Their new CEO, Kazuo Hirai, is a "detail" guy, according to Reuters - and that puts the Japanese right back into their comfort zone and where they perform best.

I worked with Sony before Sir Howard Stringer took over as CEO.  Even then, they were looking with awe and envy at what the Silicon Valley was able to achieve - and rightly so.

But, what they forgot in the process is that they do things with their way of doing business that, demonstrably, take markets worldwide.  But only when they work to their strength.

Can anyone say Toyota?

So, good luck Sony.  I'm rooting for you to find your cool again.