Wall St. Journal Validates Our "Business Model as Innovation" Predictions

When we recently evaluated our predictions for 2018, we gave ourselves a C for our prediction that said, "Innovation often will come via business models" (part of our "Key Predictions for Trends in 2018, Part II). 

Our basis for that grade was:  

We expected, for example, that upscale restaurants with a delivery-only business model (relying on mobile-ordering apps) would be a bigger trend than it turned out to be. There was some coverage of that sort of innovation – not so much of technology but in the use of technology – but it wasn’t a top story. 

However, in a Nov. 2, 2018 Wall St. Journal column that was published after we posted our grade, Irving Wladawsky-Berger, a regular contributor who formerly worked at IBM and served as a strategic advisor for Citigroup, HBO and Mastercard, actually supported our prediction about the importance of business models. The column makes the case that "It’s All About Business Model Innovation, not New Technology. New technology, no matter how transformative, is not enough to propel a business into the future." (In the interest of disclosure, I worked with Irving back in the days when IBM was a client at a former agency.)

According to his article,

Surveys show that most executives agree, and in fact, many believe that business model innovation is even more important to their company’s success than product or service innovation. 

Another key quote further validates the point we made in our initial prediction:

New technology alone, no matter how transformative, is not enough to propel a business into the future. Nor, for that matter, can past success justify existing business models. The business model wrapped around the technology is the key to its success or failure, argues Mr. Johnson, senior partner at Innosight, the strategy consulting firm he cofounded with Harvard Business School professor Clayton Christensen. 

Irving also outlines four key attributes of a successful business model:

1. Customer value proposition.
2. Profit formula.
3. Key resources.
4. Key processes.

He also identifies how tech can enable business models such as through

1. e-Commerce. (This was something that Irving pioneered at IBM.)
2. Digital platforms.
3. Models that turn data into assets.
4. Automation-enabled services.

You should check out his article to learn more and get more details on the eight bullet points. It's worth reading.

And, for us, while we won't go back in an improve our grade for this prediction, it's nice to get validation. 

Bitcoin Already a Hot Topic in 2014 -- Validates Another Prediction

In our annual trends and predictions, we identified Bitcoin as being a hot, ongoing topic in 2014.  We said:

Bitcoin and cashless payments will continue to generate interest. We’ve seen a rise in interest in bitcoins, and it appears bitcoins may be on the edge of going mainstream. We don’t think that will happen in 2014 but we do think the topic will get discussed.

But more retailers are evaluating whether or not to accept Bitcoins for payment, and already there's been a lot of coverage about bitcoins: such as:

• Yahoo Tech: "Okay, Seriously: What The Heck Is Bitcoin, And Why Do So Many People Prefer It To Dollars And Cents?"
• Bloomberg BusinessWeek: "Bitcoin Woos Washington to Ensure Lawmakers Don’t Kill Industry"
• Forbes: "Taxing Bitcoin: IRS Review Has Big Implications For Investors In Virtual Currency"
•  USA Today: "Ask Matt: Should I invest in Bitcoin?"

And those are just within two hours of when I was writing this post.

We still don't think most consumers will pay with Bitcoins in 2014 but more retailers will announce they accept it for payment in 2014 -- as a way to highlight their being on the cutting-edge.

Meanwhile, we also saw another story prediction get validation. In our list of ongoing tech trends we identified cognitive computing, led by IBM Watson, to score coverage. Here's a recent Wall St. Journal article: "IBM Struggles to Turn Watson Computer Into Big Business;Revenue Is Far From Company's Ambitious Targets."

3 Lessons from Great Fortune Article about IBM's CEO Ginni Rometty

As compared with Forbes, which is more focused on investment opportunities, Fortune has staked out management as its focus.

Jessi Hempel wrote a terrific profile of IBM's Ginni Rometty in the current "Most Powerful Women" issue. What made the article, "IBM's Ginni Rometty looks ahead" so worth reading is that Hempel not just the insight into Rometty's personality and career achievements. It's that the article contains at least three pieces of business insight that all of us can use.

Here are the three lessons I learned from the article:

• "Whatever business you're in -- it doesn't matter -- it's going to commoditize over time. It's going to devalue. You've got to keep moving it to a higher value." We should all look at where we can improve the value of our services and products.
• "IBM's most senior executives have long served on three teams -- operating, technology, and strategy -- to help guide the company. Rometty created a fourth leadership team, the Client Experience Team, which she chairs. There are no senior executives on the team. Rather, she appointed a series of client-facing executives to meet with her once a month."
•  To open new markets, sometimes you need to find new problems to solve for new internal customers.  For Rometty growth comes not just from inventing new technologies to sell to her existing clients. "Growth at IBM's scale also means creating new markets...Now Rometty is making a similar pitch to marketing executives, promising that technology will change the way they do their jobs. It won't be an easy sell: Marketers are less apt than bureaucrats to be wowed by a charismatic CEO or statistics about petabytes. Many are accustomed to seeing computing as a tool to support their creative endeavors, not the starting point."

Some good business lessons from a terrific article.

More Validation for Our Battle of Tech Titans Prediction

Earlier this year, we predicted that a continuing story line in 2011 would be: The continuing battle among tech giants: Google vs. Apple vs. Microsoft vs. Cisco vs. EMC vs. HP vs. Oracle vs. SAP. (See our blog post: Birnbach Communications' Top Predictions for 2011, The Top 12 Business & Technology Stories, Part IV.)


The latest evidence came from Google's purchase of patents from IBM, which has been cast as "So, Is It Google & IBM vs. Oracle?"

We think the clash of the tech titans will continue to be an ongoing story line for some time in the future.

Also, we will point out that back in Jan. we missed a big story of the moment: the phone hacking scandal that continues to ripple through the News Corp. empire. Well, can't get them all.

Wal-Mart selects five PR agencies

A big trend in PR among clients, a few years back, was to consolidate the number of agencies to boost efficiencies. IBM Software, which had multiple agencies operating in the US, led the consolidation trend about a decade ago.

Now, signaling a change in direction, Wal-Mart has decided to enlist five agencies, instead of one, to get best of breed capabilities. Apparently, they found that so-called efficiencies came at a price in terms of effectiveness.

If other companies follow Wal-Mart's lead, that could bode well for smaller agencies.

Should the Business World Merge with Virtual Worlds? (Part II)

SLCN brings virtual television -- a professional video network designed to expand the in-world audience as well as deliver virtual entertainment to the real-world. SLCN has become a virtual entertainment conduit of Second Life programming.

As with traditional TV segments, SLCN segments feature talking heads -- of the avatars, that is. The avatars move around, but their mouths don't move, one of several reasons these segments are disconcerting. One

In one segment about IBM's Second Life outpost, IBM Business Center, what's odd is that the interviewer, Cybergrrl Oh, and Joanne Bald, Program Director, move to several locations around the IBM Business Center. Rather than cutting to the next location, the two avatars fly -- that's right, like super heroes, they fly from location to another, and Cybergrrl actually -- no, make that virtually, says, "Up, up and way!" (Apparently they decided against teleporting.) At one point, when they land, they're still talking with each other, but aren't in the same picture because one of the avatars landed in a different place. (They eventually find each other.) When they walk around the center, at one point, one of them walks backwards or zig-zags across the floor.

There's no one in the IBM Business Center, staffed 24/5, except for Cybergrrl Oh and the IBMer. Well, there's a concierge -- staffed by an IBMer volunteer from somewhere around the globe -- but he doesn't interact with the two guests.

There's even an online game for teens.

Seems like a lot of time, resources and effort has gone into developing the IBM SL site. It looks really cool. I wonder if it's generating any business for Big Blue -- or is the point of it not sales leads at all (though they spend time on information that can be downloaded). If the purpose is a recruiting tool to show that IBM is cool, then I think on that level, the IBM Business Center is a success. They did say there was a seven-month breakeven point.

By the way, most of the content available for download on SL is available on IBM's regular website.

For Part II about business and virtual worlds, check out my post from 5/22.