July 11, 2011 by Ken Goldstein - 7 Comments

Product Development is Not Democratic

Following up my last post on the scarcity of successful internet brand turnarounds, I had a number of interesting discussions with colleagues in search of the answer why. While it would be impossible for me to boil that down to a single concept in a single blog post, the common theme seemed to be the extraordinary difficulty in reinventing the key products or services under a once a powerful but now fading brand, such that the new offerings were up to the standards of the original breakthrough experiences.

Digging deeper into this theme of why a brand that was created of innovation could have such a hard time finding reinvention in subsequent cycles of innovation, the culprit fueling failure often found the compass needle pointing at process. Where some form of good process once allowed staggering creativity to flourish, failure to reinvigorate good process most often led to uninspired product development, lackluster offerings to customers, and ultimately a continuation of the downward spiral where a turnaround was the hope. Called out for especially pernicious result:

1) Tepid Innovation—believing that a little idea was a big idea almost in desperation for lack of identifying a big idea. Copycat products that responded to market leaders to segment small bits of their commanding market share consumed energy where market leading ideas remained in small supply.

2) Lack of shared vision—weak leadership failed to articulate a big idea around which teams could rally, so buy-in became compelled rather than organic. Empowering strong leaders to lead is not often enough a company’s core competency, because truly creative rebels don’t want to be managed, they want to be sponsored, so that they can make change happen in cultures that prefer conformity, and conformity is not how you win market share. When the right leaders are chosen and empowered, they can build a shared vision by leading, not managing.

3) Corporate intervention—a young company acquired for its Think Different mentality and bold new ideas becomes indoctrinated in the prevailing corporate culture of the parent, and begins to see the world through the lens of the acquirer rather than for the reasons it was acquired.

4) Lack of listening—there is no longer a measurable correlation between time on the job and quality of concept. The youngest arrival in a company may just have the best ideas, but if there is no forum for real listening and discussion, the most creative voice can be too easily silenced.

5) Marketing/Engineering Wars—rather than partner, the two necessary sides of the winning formula argue for the sake of winning the argument. They forget what it means to win—that their competition works at another company.

Many of these themes are explored in the brilliant and surprisingly nontechnical book Dynamics of Software Development by Jim McCarthy, which I have encouraged every senior executive I have met to read as well as every staff leader I have mentored. In my experience the core issue comes down to learning how to build a consensus, understanding that consensus building is not polling or voting or majority rules. Product development is an expertise, like any other profession. Many individuals can learn to do it adequately, but few can do it extraordinarily.

Look at some of the new wave of great companies and you see the top-tier of product development pros at the helms: Mark Zuckerberg, Reed Hastings, Elon Musk, Reid Hoffman. Of course those are all CEOs of substantial, important, disruptive companies and they are not available for brand turnarounds at internet companies on the rebound, but the question remains, are the people being put in charge of turnarounds somehow similar in nature and characteristics to the great leaders of product development? Are they able to articulate a vision around which people can rally willingly and with trust? Do they listen to a multitude of opinions and then make decisions that incorporate feedback because it is critical, not because it represents a political agenda? Do they have good taste, and can they see beyond the state of today to leapfrog a competitor with perhaps something that didn’t do well in a focus test? Have they built a process in their environment where good work can shine and fast iteration can overcome mediocrity in rapid succession?

Consensus is an astonishingly complex concept; it is not at all compromise. It begins with vision, It is evangelized through leadership, It becomes stronger through group participation and feedback, but it is guided to completion by the same vision and leadership from which it emanated. Consensus goes off track when a leader feels for whatever reason that bits of all contributions most be included to create the consensus, the proverbial camel with two humps. That is wrong, because all comments and critiques will not be right if breakthrough products are your goal. Group participation is a must to achieve organic buy-in, listening is a must for a leader to bypass being feared as a despot, but for great product development to triumph, a vision must remain strong, pure, unique, original. That can never be taken for granted, and everyone on a team will not always be happy at every twist and turn. Yet if you have ever had the privilege of working on a world-class, game changing product, you know that most sins are forgiven when it all comes together through good process, and it does not look anything like the system of checks and balances we see in representative government.

Product development is driven by a different motive set, of creative destruction and inspired disruption, a high stakes arena where often winner takes all, second prize means you go home. Democracy does not work there, and democratic compromise is not workplace consensus. Show me a great product, and I know you will find iteration, but I bet you won’t find haggling.

Vision is what launches a brand. Vision will always be key to reinventing a brand. Process is the key to translating ideal vision into working reality. Consensus is the element of process that gets everyone on a team to remain part of the team, because success is owned by the team, not by its individual components. Get most of that right and product development has a fighting chance, and so might reinvention.

July 3, 2011 by Ken Goldstein - 2 Comments

Fleeting Moments in iHistory

Why don’t internet brands make comebacks?

With the recent attention on onetime market leaders AOL, Yahoo, and MySpace to inject new creativity into their platforms, I have been talking with a number of people about why this notion isn’t business as usual, with the expectation that success is much more probable than unlikely. We are so quick in the internet age to exchange snarky remarks about last year’s fading nameplates, as if it were all but inevitable that a fallen giant cannot get up and march on. Why?

Well, aside from our gossipy predisposition to critique, there is a good reason we take a skeptical point of view about internet brands that have seen better days—in almost all cases, those were their best days. Major turnarounds don’t seem to be the norm. Sadly, they don’t seem to be out there much at all. We can point to several works in progress where noble efforts are underway, but we can’t really write a business school case study on a revamp that is making history and ripe for the textbooks.

Although this is reality, it does not make sense, certainly not good business sense.

Most traditional brands go through life cycles: they are cool for a while, then something inevitably goes wrong—operational mishaps, disruptive entrants, or market forces—then visionary management attacks the problem and turnarounds do happen, sometimes monster turnarounds. Think about what happened with the rise and fall and rise of Disney, the same but even more so at Apple, the customer win back at Coke after the public rejection of new-Coke, multiple cycles up and down at Sony, the same to a lesser extent at MTV. All of these instances gave management—often new management—a starting point for the very real consideration of turnaround plans. Management carries out the traditional SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis, and the discussion centers around how probable the turnaround plan under consideration might be, not a passive discussion of should we bother. You always bother.

Look at what happened at the Wall Street Journal—newspapers have been pronounced on their way to the graveyard, but the brand has never been stronger and circulation is growing on multiple platforms. That is giving the New York Times hope, the Los Angeles Times as well. You always try because the asset you have is too valuable not to try. CBS, NBC, ABC, HBO, they all have good and bad seasons, but you don’t think about walking away after a bad season. Look at MSNBC, how it struggled out of the gate, now it has an identity. Sticking with an established beachhead can work, surely not all the time, but there are so many examples where the uphill effort is proven to be worth it.

Like internet brands that have enjoyed success, non-internet brands once in the limelight come to the outset of a turnaround with some remaining loyalty, mass reach, measurable unaided awareness, and some core value proposition. The fact that tastes have changed or tactics have failed doesn’t mean you have lost everything; you just have a lot less of it. You have something to work with, so you don’t walk away. Your investors would not be pleased with those kinds of write downs.

Let’s think about the dotcom bubble and all the brands it birthed, starting with the portal wars—Excite (then Excite @Home), Lycos, Looksmart, Infoseek (then Go.com)—they all had huge followings! Now they are answers to trivia questions. What about Friendster, eToys, Netscape, NeoPets, Encarta, GeoCities, Pets.com, Webvan? These were all massively attended internet destinations, great names with tremendous followings built on innovation and creativity. Was there really nothing better to do with their identities than turn away?

I started to wonder whether our relationship with brands today is somehow different from our relationship two, three, four decades ago. Were we somehow more willing to give brands a second chance then that we are not now? Is this generation of consumers somehow wired differently? Have we come to a new understanding of inertia so that once cold something must stay cold? That would have been an easy answer, but one trip to the Apple Store will change your mind quickly. Spend a little time in the store with the other customers and you will soon be reassured how much a once loved, then dismissed, then reinvented brand can be loved anew. Ask tweens about Disney Channel, which they never would have been caught dead watching a generation ago, but now it too has been reinvented to become a trendsetter.

Brand laws may evolve, but they haven’t died.

What seems most ironic to me is that when you look at the giants of brand reinvention, the core turnaround strategy is not financial engineering, but rediscovery of the company’s roots in innovation. Disney expanded its theme parks, its own hotels, rebuilt its animation efforts, created the Disney Store, and rode a wave of home video before acquiring ABC and later Pixar and Marvel. Upon the return of Steve Jobs, Apple pioneered the iMac, then iTunes, then the iPod, then the iPhone, then the iPad, all the while building out the Apple Stores. Microsoft from a standing start entered the entertainment world with Xbox, as Sony had done prior to that with PlayStation. Clearly these involved massive investments, but they were bets on products and services, new ideas from talent and passion within the company.

Can we imagine a day when Google, Amazon, eBay, or Facebook are no longer top of mind with consumers? What about Netflix, LinkedIn, or YouTube? If history is a guide, it is entirely likely one of these or another equally strong internet property will fall out of favor. Are we likely to see it left to harvest? I would bet 100% the answer is no. Reinvention will be the order of the day, and revitalization will follow with new products, new services, and creative marketing to support those initiatives, no different from the offline world.

Internet brands are born of talent and passion—they are the very picture of innovation. So why if they can be invented with innovation can they seldom seem to be reinvented with innovation? Is the answer to be found in independence vs. acquisition by an umbrella company, where founding talent departs and corporate bureaucracy takes over? Possibly, but that seems more like an observation to me than a fait accompli. Just because a young company is bought on the way up or down doesn’t mean it cannot survive a downtown. The question has to be what is being done to address the downturn. If the downturn is being addressed through a product strategy with talent and passion, there is every reason to believe a new vision can have success. Just because it hasn’t happened doesn’t mean it won’t happen. We all have reason to want it to happen, because that creates more opportunity for the industry and sends the right message to customers, that we do listen to them and change can happen when we are serious about it.

Optimism as a driving force is always good. The change that happens in the analog world will translate to the digital world. When a once adored brand is down, root for reinvention.

June 27, 2011 by Ken Goldstein - 4 Comments

Your Gun, Your Badge, Your Honor

Last week I attended a panel discussion at the LA Film Festival called Your Gun and Your Badge whose participants included:

Robert Crais (Writer, Cagney & Lacey, Baretta; author of the Elvis Cole mysteries)
David Milch (Writer, Hill Street Blues; creator NYPD Blue)
José Padilha (Director, Elite Squad, Elite Squad: The Enemy Within)
Gerald Petievich (ex-Secret Service agent and author, To Live and Die in L.A.)
Moderated by Los Angeles Times contributor Mark Olsen

Full disclosure, I worked for David Milch more than 20 years ago and consider him not only one of the finest working writers today, but an immensely impactful teacher. I hadn’t heard him speak on the writing craft since I worked for him so long ago and arranged a series of lectures he gave, which carried forward the ethos he previously established when he taught creative writing at the university level.

Mark Olsen of the Los Angeles Times set the tone for the panel by noting our location downtown, the heart of so many noir tales and a reality base for police activity that defines many episodes from which fiction is derived. All of the writers shared varying perspectives from successful careers as storytellers, but what struck me most about the discussion was its common theme focusing on authenticity. This notion of establishing the set of norms that constitute a world view and then remaining true to them transcended police work in my mind, it even transcended the procedural staging of those norms in the form of entertainment. In approaching their craft, the writers universally noted the mandate for extensive research as a requirement of their approach, and a bottom line almost moral responsibility to understand the details of the world they would portray before they could begin interpreting it.

Gerald Petievich, a 20 year Secret Service agent turned novelist and later screenwriter, repeatedly used the term “verisimilitude” to describe the requirements of his characters. Jose Padilha, who was sued in Brazil for his portrayal of violence as commonality in the Elite Squad, referenced the suit as evidence he had achieved the authenticity he sought. Robert Crais, attempting to define process in his approach to character development, quoted the renowned author Joseph Wambaugh who wondered, “Does the cop work the case, or does the case work the cop?” David Milch talked in detail of how we watch characters struggle to overcome their failings, summing up his reflection with the powerful descriptor: “If there is a God he wants us to be honest; if there isn’t, it’s even more important.”

As I kept hearing these words become almost the foundations of a chorus — authenticity, verisimilitude, honesty — it occurred to me that so much of what we consume as popular showmanship is experienced in the form of escapism. Our hunger for Super Hero movies seems insatiable, and with occasional exceptions, the documentary film as a form of commercial entertainment has seen better days. Yet authenticity is a broader construct than a simple portrayal of reality — as was noted by the panel, Ziegfield was as committed to getting every stitch in every costume right, not because the audience could necessarily see it, but because whoever was wearing the costume had to know it was correct to convey the same notion of authenticity under that banner.

The consistency of this message of the artist’s commitment to authenticity was inspiring and thought-provoking. Anyone can pay lip service to the notion of honesty, but an audience can feel the writer’s dedication in the work when presented. But what about in the workplace, is our commitment to verisimilitude as profound as that of the author? Is it as pronounced as it should be? Is there a relevancy in this ethos to how we approach day to day business, the seriousness of our research, the authenticity of our value propositions and commitments to colleagues and customers?

It occurred to me that I had never heard a panel discussion at any business conference I ever attended even remotely like this one, certainly not with top dogs of equivalent stature in their respective fields who have earned the permission to delve in such expression. Thinking about the headlines of late — of homes with mortgages underwater, of securities backed by worthless collateral, of for profit schools leaving students in debt without marketable skills, of a once trusted giant of personal financial management now behind bars — I wonder where is the verisimilitude in all that. Surely a scam is born every few minutes, without them there would be much less to write about, but the creators of products and services might do well to see intrinsic value in the pride of authenticity, the self-knowledge and reflection that it is expected of us no differently from the creators of books, television shows, and movies. Just as we can abandon any form of media if the hard work of noble construction is not present, so can a brand be abandoned by customers in a world of choice.

The applicability of authentic commitment seems less metaphorical than an actual model of success, where the judge is first oneself, followed then by making the offer available to others. A scene depicted without requisite deliberation is a skit. A brand evangelized without a consistent promise is a logo. It’s not hard to see the distance, but it takes more than words to close the gap.

We all crave authenticity. We all crave verisimilitude. We all crave honesty. Imagine the power of unlocking the value in that inspiration in everything we do. The storyteller may lead, but we all can have a great deal of skin in this game if we hold ourselves accountable for the same level of commitment to detail, rigorous study, ongoing iteration, and a set of beliefs that reflects equal parts respect for the subject and the audience. That to me is a story worth telling, experiencing, and sharing.

It’s not just about police work, it’s about all work.

June 14, 2011 by Ken Goldstein - 0 comments

In Honor of E3 – Drawing Lines

And now for something completely different…

E3 — a.k.a. the annual Electronic Entertainment Expo — was held again earlier this month in Los Angeles, where many hope that it will stay. If you have never attended E3, it cannot be adequately described in words, it is an experience of the senses — loud, visual, politically incorrect, a descent into adolescent decadence as long as what you really want to do is see the latest in new video and computer games coming soon to a device near you, currently invented or otherwise.

I didn’t get to the show floor this year, just to a nice dinner with former colleagues and some interesting meetings, but immediately prior to the show, I was asked by a college student studying for a degree (gasp!) in videogames for my opinion (horrors!) on issues of censorship in game land. Here I provide my largely unedited memo to that fellow, to which he recently responded my material made the cut and he received an A on his presentation. We’ll see if you agree…

College Student Question 1:

What is “the line” for videogame developers in regard to deciding what kind of content is not included?

KG Response:

There are two answers to this question, artistic and business. In terms of artistic, the question is no different from any other art form (literature, painting, film, etc): is it true or “felicitous” to the content? By felicitous the artist implies the necessary use of whatever element of free expression is necessary to make his or her point with the best tactic available to advance the project. Of course this is subjective, but that’s what separates an artist from an amateur, effective application of subjectivity. If as an artist you need to use violence in a certain way to make a point or advance the story, you do so in the most honest and appropriate manner for the effect you need to advance the work. The opposite of felicitous in creative endeavor is gratuitous, meaning the decision is made purely for commercial reason, shock value, impact, or audience effect, what is most often referred to as hack work. When you see a string of cool special effects and all you can say is, “wow, cool special effects” and there is no other point, that’s gratuitous and likely should be edited. An artist uses a filter of appropriateness based on vision, not implication.

On the business or practical side, it is really quite simple, just like the movie business. Someone else is financing your work, whatever rating the entity financing the work wants, you edit to achieve that rating. No question, the marketing reasons will always trump artistic expression when someone else is financing your work to get the best possible return on investment they can. If you don’t like that, finance it yourself, but you will have a very high risk of losing your money because with financing comes distribution. Abundant marketing and promotion dollars are most often provided by those who have the most skin in the game in a double down strategy, and they are by no means free of hooks, quite the contrary, but with all the noise and competition for mindshare, a good publisher can add tremendous value when you are aligned. With trust established, the editorial dialogue between publisher and developer can also be immensely satisfying.

College Student Question 2:

How do game developers decide on the level of sensitive, questionable, and possibly offensive content in their games?

KG Response:

To be honest, one of the reasons I took a hiatus from the business a few years ago is because the artistic sensibility was not advancing at the same level as the technology. The majority of auteurs in game development tend to push the technology and pay lip service to its meaning, if any. In most other art forms the artist’s desire to advance spiritually and intellectually tends to develop with the craft and with age. I don’t see that in games as much. It is a very young industry, most often with very short life cycles driving the creative process, which can be great for business because the craft means to sell peer-to-peer, but in terms of thoughtfulness about the greater art form and what goes in and what comes out, I don’t see enough introspection. There are a few, like Will Wright and Shigeru Miyamoto, whose scope has developed with their craft and their tools, but mostly it’s the next generation simply trying to “out cool” the competition. Sequels and branding increasingly become overpowering forces over freeform imagination and exploration as capital requirements increase, just like movies. That’s just the way it is, not good or bad, just reality.

Zynga has changed some of that with a new paradigm for lightning fast development and iteration in social contexts that is much less demanding of production values, which makes them less dependent on eye candy. The fast rise of relatively cheap mobile apps is also bringing back a level of independence that allows more experimentation and creative risk. Yet it would be great to see a few gifted minds really explode the give-and-take storytelling platform (you can’t say “interactive” anymore without drawing sneers) taking a weed wacker to clichés and with subject matter beyond outer space creatures, monster machine guns, dungeon royalty, and various interpretations of the technocrat’s apocalypse.

College Student Question 3:

How seriously do game companies take the critics who claim that video games are terrible for children and the cause of societies problems?

KG response:

Game companies worry about customers and sales. When sales stop because of this or that element, they stop putting it in the game. This too de facto is neither good or bad, it just is. If PR makes a game sell, it’ good. If it makes a game stop selling, it’s bad. This is a business like any other business. If you are not fully responsive to customers you will go out of business. Do you think the people who make Oreos had a sudden revelation about trans fat? No, it made the headlines as a direct link to poor health, sales dipped, and now you have Oreos without trans fat. That is the way capitalism works, and whether it has a spiritual ground is irrelevant, it is the best way known for a business to work. Customer opinion is EVERYTHING because sales reflect customer opinion, especially in a world of social media and internet exchange of unedited public opinion. Noise will always be noise, but sales are not noise.

So what do you think, did we earn our A? Or do you think differently about the lines of censorship in gaming, how they are applied or how they should be applied? Please join the dialogue publicly or privately. Game On!