Gladwell studied the lives of extremely successful people to find out how they achieved success. This article will review a few examples from Gladwell’s research, and conclude with some thoughts for moving forward.

Violins in Berlin

In the early 1990s a team of psychologists in Berlin, Germany studied violin students. Specifically, they studied their practice habits in childhood, adolescence, and adulthood. All of the subjects were asked this question: “Over the course of your entire career, ever since you first picked up the violin, how many hours have you practiced?”

All of the violinists had begun playing at roughly five years of age with similar practice times. However, at age eight, practice times began to diverge. By age twenty, the elite performers averaged more than 10,000 hours of practice each, while the less able performers had only 4,000 hours of practice.

The elite had more than double the practice hours of the less capable performers.

Natural Talent: Not Important

One fascinating point of the study: No “naturally gifted” performers emerged. If natural talent had played a role, we would expect some of the “naturals” to float to the top of the elite level with fewer practice hours than everyone else. But the data showed otherwise. The psychologists found a direct statistical relationship between hours of practice and achievement. No shortcuts. No naturals.

Sneaking Out to Write Code

You already know how Microsoft was founded. Bill Gates and Paul Allen dropped out of college to form the company in 1975. It’s that simple: Drop out of college, start a company, and become a billionaire, right? Wrong.

Further study reveals that Gates and Allen had thousands of hours of programming practice prior to founding Microsoft. First, the two co-founders met at Lakeside, an elite private school in the Seattle area. The school raised three thousand dollars to purchase a computer terminal for the school’s computer club in 1968.

A computer terminal at a university was rare in 1968. Gates had access to a terminal in eighth grade. Gates and Allen quickly became addicted to programming.

The Gates family lived near the University of Washington. As a teenager, Gates fed his programming addiction by sneaking out of his parents’ home after bedtime to use the University’s computer. Gates & Allen acquired their10,000 hours through this and other clever teenage schemes. When the time came to launch Microsoft in 1975, the two were ready.

Practice Makes Improvement

In 1960, while they were still an unknown high school rock band, the Beatles went to Hamburg, Germany to play in the local clubs.

The group was underpaid. The acoustics were terrible. The audiences were unappreciative. So what did the Beatles get out of the Hamburg experience? Hours of playing time. Non-stop hours of playing time that forced them to get better.

As the Beatles grew in skill, audiences demanded more performances – more playing time. By 1962 they were playing eight hours per night, seven nights per week. By 1964, the year they burst on the international scene, the Beatles had played over 1,200 concerts together. By way of comparison, most bands today don’t play 1,200 times in their entire career.

Falling in Love With Practice

The elite don’t just work harder than everybody else. At some point the elites fall in love with practice to the point where they want to do little else.

The elite software developer is the programmer who spends all day pounding code at work, and after leaving work she writes open source software on her own time.

The elite football player is the guy who spends all day on the practice field with his teammates, and after practice he goes home to watch game films.

The elite physician listens to medical podcasts in the car during a long commute.

The elites are in love with what they do, and at some point it no longer feels like work.

What’s Next?

Now that we’ve reviewed the trends uncovered by Gladwell’s research, what can we do about it? All of us want to be great at something. Now that we know how other achievers have gotten there, what can we do to join their ranks?

One approach: We could choose a field and practice for 10,000 hours. If we are currently working in our target profession, forty hours per week over five years would give us ten thousand hours.

Or… We can look at the question in reverse. Where have we already logged 10,000 hours of practice? What is it that we do really well? What tasks do we perform so well that people ask: How did you do that? Sometimes when we fall in love with practice we don’t even recognize it!

If you’re running a company, what does your company do better than anybody else? What is it that the individual members of your company do better than anybody? How do you create an environment that gives everyone on your team the opportunity to practice?

Conclusion

Business is tough, especially now. Yet even in the midst of a challenging economy, there are individuals and companies that prosper beyond all expectations. Practice plays a major role in success.

Suggested Reading

Outliers, by Malcolm Gladwell. Through interviews and statistical analysis, Gladwell determines why some people and organizations achieve success far beyond their peers.

About the Author

Raymond T. Hightower is president of WisdomGroup, creators of outstanding web-based software. WisdomGroup leads the open source user group ChicagoRuby and we created the annual WindyCityRails conference.

How does Google index the world’s knowledge for free and still earn $10 billion per year? Why does a web marketing consultant give free web site evaluations to 650,000 visitors? How does a business make money when nobody appears to be paying for anything?

The fact: People are paying, and some of the ways we pay are more valuable than money.

Website.Grader.com

Visit http://website.grader.com and enter the URL for your web site. This online tool will examine your site and email you a report with ideas for improvement. Cost to you: Zero.

Why would HubSpot, the makers of Website Grader, provide such valuable information for free? Because each free user is also providing valuable information to HubSpot. Over 650,000 sites have been graded by the tool. The company now has a database of web site behavior that they can leverage as they develop strategies for their search engine optimization (SEO) business.

What would it cost HubSpot to gather this information without the online tool? Six figures at least. But by offering a free web site evaluation, HubSpot gathers information that is valuable in other areas of the company. Zero cost, huge ROI.

Everybody wins in the HubSpot arrangement. Free visitors win because they get ideas they need to improve their web sites. HubSpot wins because they get data they need to serve their clients more effectively. And HubSpot’s paying clients win when their consultant creates web strategies based on a rich set of real data, not empty theories.

GMail Leverages Users

GMail is the free email service offered by Google. One of its most compelling features: The best antispam engine on the planet.

GMail leverages its users to improve the antispam engine every day. How? Users who encounter spam are encouraged to click on the “report spam” button within GMail. Two immediate results:

• The offending message is removed from the user’s inbox.
• GMail’s antispam software learns to recognize spam based on the types of messages rejected.

WisdomGroup has evaluated antispam software from many companies. Our conclusion: GMail’s free antispam software is better than other packages that cost thousands of dollars per year. GMail’s system is taught by the best teachers around: Real people. Millions of people instruct the antispam engine every day (at no cost to Google) by clicking “report spam.”

In GMail, Google has created a system with multiple winners. Users get less spam and free email. GMail gets an outstanding antispam engine with free “instructors.” And Google gets millions of potential customers for their advertising business, their real cash cow.

Not Easy. Just Different.

How much does it cost to acquire a customer in the non-online world? Depending on the business, you may have to figure in the cost of advertising, cold calls, and face-to-face sales calls.

But when dealing online, the cost of acquiring a customer approaches zero in a well-designed business system.

Of course, your competitors also enjoy low customer acquisition costs, so the pace of competition has increased. The game is not easier. Just different.

Freemium Business Model

The term freemium was coined by a venture capitalist in 2006. Freemium combines free with premium in this manner: Provide a basic service for free, and offer a premium version for those customers who value an upscale version of the service.

When the marginal cost of providing a service approaches zero, you can afford to give it away if it enhances other areas of your business. Freemium in two steps:

• Attract a large number of stakeholders by offering something of value for free.
• Attract a second group of stakeholders & charge them for access to the first group.

Of course, freemium is just a new name for something that television broadcasters have done for years.

• Attract millions of viewers who pay nothing to view the content.
• Charge advertisers who want access to the millions of viewers.

Note that the freemium model only works if the cost of acquiring customers is extremely low. In the case of television broadcasters, it costs nothing to acquire another customer because the signal is being broadcast anyway. In the case of Web 2.0, customer acquisition costs are driven lower by the downward spiral in the cost of hardware, software, and bandwidth.

Wikipedia

Wikipedia is an online encyclopedia that seems counterintuitive on the surface. Wikipedia allows updates from any user who wants to log on. Yet if you put 10,000 Wikipedia users in a room, only 100 of them could say that they’ve ever updated an article. Further investigation shows that a tiny group (18 of the 10,000) are responsible for 72% of the articles. How does Wikipedia work with just a tiny fraction of contributors?

Enthusiasts Driven By Passion

Wikipedia is controlled and updated by enthusiasts driven by passion. Everybody is driven by something. The authors of Wikipedia articles tend to be passionate experts on their subjects. Debates (scholarly and otherwise) erupt in the same way that they do in the non-online world. The difference: Debates are conducted online where interested parties can view both sides of the argument.

Wikipedia is a not-for-profit organization. The founders launched the online encyclopedia as an experiment and it has grown beyond their expectations.

Wikipedia: So What?

Why do we care about Wikipedia if they don’t make money? We care because of what they managed to do to revenue-generating competitors like Britannica and World Book. What would happen to your business if a competitor reduced their price to zero? What steps would you take to compete?

What About Twitter?

Twitter, the 140-character micro-blogging service, is the latest Web 2.0 poster child. As of this writing, rumors of a Google acquisition are flying around. Twitter is a Web 2.0 company that has yet to make money. They’ve cracked the first part of the freemium business model – they now have millions of users. Now, how will Twitter make money? Advertising is almost a cliche. Will Twitter offer other services?

Conclusion

Web 2.0 is not about technology. It’s about enabling large groups of people to work together in a manner that benefits all parties. Some benefits are financial, other benefits come in the form of services and/or information.

For those running Web 2.0 businesses, not every stream is independently profitable. But this is fine if an unprofitable stream stimulates purchases in profitable areas. Everybody wins.

Suggested Reading

Web 2.0: A Strategy Guide, by Amy Shuen. The author took a great deal of risk in writing this book because Web 2.0 is difficult to define and it changes daily. Yet the book remains relevant because it focuses on concepts that remain constant such as power laws and the freemium model.

About the Author

Raymond T. Hightower is president of WisdomGroup, creators of outstanding web-based software. WisdomGroup leads the open source user group ChicagoRuby.org, and we created the WindyCityRails conference.

You are already familiar with the 80/20 rule. In the late 1800s an Italian economist discovered that 80% of the wealth in his country was owned by 20% of the people. More recently we find that the 80/20 rule applies in other areas of our lives. Professional service firms find that eighty percent of the revenue comes from twenty percent of the clients. Merchants find that eighty percent of sales comes from twenty percent of the products. Winners at the very top of any field tend to win by a large margin.

Another View of the 80/20 Rule

The Long Tail by Chris Anderson offers another way to look at the 80/20 rule. Our business example: A book store. The graph below shows book sales ranked by sales volume. Best-sellers are on the left side of the chart (in green) while slower sellers fill in the curve toward the right. Since shelf space is limited and expensive, the store only carries the most popular books along the left side of the chart. Smart application of the 80/20 rule, right? Maybe.

The Long Tail: Everything Else

High-volume books sell much more than other books. High-volume books (the short head) are the 20 percent that generate 80 percent of the revenue. The Long Tail is made up of everything else.

When a book store chooses to carry 20% of the available titles, how do they decide which 20% to carry? How do they predict the hits in advance?

Answer: They can’t. Sometimes a sure hit fizzles into a dud, while a “sleeper” rockets to the best-seller list. A similar problem is faced by movie distributors, retail stores, and other businesses. How do you profit from hits that you cannot predict?

The Long Tail in 1897

Sears, Roebuck & Co. is one of the oldest Long Tail companies in the USA. If you wanted to buy a product in late 1800’s America, you would visit the general store. Most Americans lived on farms at that time, so visiting the store meant riding into town. Product selection was limited to the items on the store shelf. Shopping for a better price meant traveling to the next town — a tough journey in the days before automobiles.

Sears entered the scene in 1897. Launching in the middle of the railroad boom gave Sears access to a cheap delivery system for both suppliers and customers. Efficient warehouses located at the country’s busiest railroad hub, Chicago, maximized their distribution leverage. The result: The cozy general store system was disrupted by the Sears catalog, 786-pages filled with more products and better prices.

Note that the Sears catalog did not put the general store completely out of business. Impulse buyers still shopped at the general store. But Sears certainly shook things up by making Long Tail products available for everybody.

The Long Tail in 1994

In 1994 a math geek named Jeff Bezos was reviewing Internet investment opportunities. Bezos observed that book sellers were expanding their physical stores, but none were expanding on the web. He smelled an opportunity. Bezos believed that a new distribution system (the web) could make a wider selection (the Long Tail) available to the world. Amazon.com was born.

Sears launched in the middle of the railroad boom, and Bezos launched Amazon.com in the middle of the first Internet boom. Sears benefited from inexpensive distribution via railroads, while Amazon distributes its catalog virtually free via the web. Great business ideas often repeat themselves.

The Long Tail Today

Do you remember record stores? Record stores had a problem — limited shelf space. Store managers had to figure out which records to stock by predicting (in advance) which records would sell best — the 80/20 rule again.

Some people argue that record stores were destroyed by free music downloads. However, “free” was only part of the problem. The bigger challenge came from the wider selection (Long Tail) offered through music downloads. In January 2009, Apple announced that over six billion songs had been downloaded through iTunes at 99 cents each. Apple’s distribution costs are virtually zero thanks to iTunes.

Apple found abundant opportunities in the Long Tail of music distribution. Video entertainment is next.

What About the Crud?

Some argue that there is a reason why some products are in the Long Tail instead of the short head: If you consider the entire spectrum of any product type, a large percentage of it is crud. The music industry is one example. True, the “better” music gets recorded by a large music studio or played on radio stations. But the Long Tail is full of music that never made it that far — from the amateur taking his first lesson to the garage band with great musical skills and bad marketing.

Of course, one person’s crud is another person’s masterpiece. Musical tastes vary widely. The Long Tail works in the digital music business because it makes tiny niches of music available to people who want them.

The Long Tail Future

Given the success of Long Tail companies (like Sears, Amazon, and Apple) one might wonder if there are any Long Tail opportunities left in our economy. The answer is yes! Anderson argues that a Long Tail company needs to do two things to succeed:

1. Make a wide selection available, from the short head and the Long Tail.
2. Help customers find what they want.

Everything, Easy to Find

If you make everything available, customers could become annoyed if they have to sift through it. So we have to make it easy for them to find exactly what they want.

Sears made everything available through railroads, and they solved the sifting problem with the Sears catalog. The catalog served as a convenient way for customers to find the products they wanted.

Amazon’s recommendation software is wonderful — unless you’re a customer trying to save money! The engine examines a customer’s past purchases and uses that information to suggest future purchases. Human clerks have done the same thing for centuries. But Amazon’s software does it faster with zero vacation days.

Apple makes everything available and easily searchable through iTunes.

Conclusion

History shows that Long Tail opportunities tend to coincide with the introduction of disruptive technologies. Railroads and the Internet are two examples. Sears could not have existed in catalog form before railroads. Amazon could not have offered the long tail of book selection without the Internet. In both cases, the advent of a faster & cheaper distribution system was a catalyst for a powerful new business model.

Are there any Long Tail opportunities left in today’s marketplace? Yes. And the next Long Tail enterprise might be launched by you.

Suggested Reading

The Long Tail, by Chris Anderson. The drastic reduction in the cost of distribution for digital information has far-reaching effects upon our economy. As a result, some businesses will thrive while others will die.

About WisdomGroup

WisdomGroup is a software company that creates apps for the web and for mobile: iPhone, iPad, and Android. WisdomGroup also serves the open source community through leadership of ChicagoRuby and related conferences.

Who creates the most heavily used web server software? Who has a bigger share of the web server market than anybody else? Hint: It’s not Microsoft.

More than half the web servers on the Internet use a powerful blend of open source software: a web server called Apache and an operating system called Linux. One market research firm reports that 75% of new web servers launched in September 2008 run Apache on Linux. Google, Yahoo, and Amazon all run Apache and Linux. They’ve bet their companies on this decision.

Given that several successful companies have bet their livelihood on open source, you might ask these questions:

• What is open source?
• Why should I care?
• How can my company benefit?

Source Code, Executable Code

Let us first define the word “source,” which in this case refers to source code. Source code is a human-modifiable form of software. It’s software as created by programmers. Source code must be translated into executable code (through a process called compiling) before a computer can run it.

Water is a useful metaphor for this discussion. Water can exist in three different states (steam, liquid, and ice) without changing its chemical properties. It’s still water. Likewise, software can exist as source code or executable code – it’s still software. We use water in one of its three states depending on whether we want to wash a car (liquid), cool a drink (ice), or clean a carpet (steam).

In the world of software, executable code is difficult for humans to read, but easily digested by computers. Source code is easily read & modified by humans, but indigestible by computers.

One Way Translation

Translating source code into executable code is a one-way street. Once a programmer has compiled source code into executable code, it is virtually impossible to convert it back into source code. You might think of a compiler as a blender that chops the food into a form easily digestible by the computer. After it’s chopped, the food never returns to its original form.

That’s why programmers always keep a copy of the source code handy. You might need to make changes (fix bugs) and re-compile.

Trade secrets that are hidden in executable code can be easily read in source code. So developers go to great lengths to protect their source code, except in the open source community.

Closed Source Tradition

Most of today’s business software is closed source. Two examples: Microsoft Office and Apple iWork. Both Microsoft and Apple consider the source code for their respective office suites to be highly confidential. You will never (legally) download the source code for a closed source product. Security is so tight at Microsoft, for example, that engineers are only allowed to view that portion of the source code that is relevant to their current project.

Contrast that against open source software. Open source products make the source code freely available for viewing, comments, and modification by the software community at large.

Open Source Chaos?

But doesn’t such openness lead to chaos? Intuitively, you would think so, but it doesn’t. The culture of the open source community has its own rules of conduct that most members willingly follow. Rules are enforced by the community in ways that developers respond to.

It is difficult to imagine an apparently chaotic system that produces robust software. How counter-intuitive! But a long list of successful open source projects (available through your favorite search engine) shows that the method works. Programmer & anthropologist Eric S. Raymond explores open source cultural norms in his book, The Cathedral and the Bazaar.

The Banking Metaphor

Some makers of security software believe that hiding their source code will prevent malcontents from finding & exploiting vulnerabilities. Their reasoning is like that of a bank owner who keeps the building blueprints secret so thieves don’t know how to drill the safe from next door.

Other security software companies take a different view. They want many people (including malcontents) to view the code so that vulnerabilities can be discovered and patched early. Their philosophy could be summed up in a statement by Linus Torvalds, the creator of Linux: “Given enough eyeballs, all bugs are shallow.” In other words, when you have thousands of developers working on the same project they are likely to be widely dispersed across the code. Wide coverage means that a given bug is more likely to be discovered by at least one developer.

In our banking metaphor, the open source company would be like a bank owner who wants many people to review the blueprints, find the weak spots, and fix security holes before the bank gets robbed.

It’s Not All-or-Nothing

Choosing an open or closed source strategy is not an all-or-nothing decision. Google, the busiest search engine on the web, has bet the company on open source software. And yet their most strategic software, the secret mathematical engine that drives their search results, remains closed. So how does a company decide what to open and what to close?

Open source works when the upside of sharing outweighs the downside of exposed code. In the Google example, using & contributing to Linux gives Google a very stable operating platform at a relatively low cost. In effect they are leveraging the time and talent of thousands of developers around the world, while those developers are also leveraging Google’s expertise.

It doesn’t matter that Google’s competitors also benefit from that same stable Linux platform because Google differentiates itself through advanced search techniques. By leveraging the community for assistance with the platform (Linux, Apache, and other tools), Google frees up engineering time & talent to focus on their secret sauce (search methodology & mathematics).

If Your Business Isn’t Software

So…What if you don’t run a software company? How can you profit from open source software?

There’s always a chance that open source won’t work for your company. Maybe you run an enterprise that doesn’t benefit from the web. In that case, your current software options may suit you just fine.

Of course, you may have already benefited from open source. There is at least a 50% chance that your company’s web site runs on Linux. If that’s the case, then rest assured that you’re running on a very stable and robust platform.

Think Big, Start Small for ROI

If you really want to see ROI from open source, encourage your technical team (software developers, network support, etc.) to explore open source tools. Chances are that they’ve already experimented with open source and they’re waiting for an opportunity to do an official company project.

Start small, perhaps with an automated network monitoring project or a small database. As you explore the technology, new ideas will become apparent to you. View this as a way to accelerate & strengthen the software development process.

Open Source and Automobiles

BMW is arguably the best automotive engineering company on the planet. Does BMW invent the wheel every time they design a new automobile? Absolutely not. BMW leverages thousands of years of “open source“ wheel technology, and they focus their design energy in areas where they can make a difference: engine, transmission, suspension, and luxury amenities. A similar model can be applied to software development. In fact, it already has.

Suggested Reading

The Cathedral and the Bazaar, by Eric S. Raymond. The author is both participant and anthropologist in the open source community.

About the Author

Raymond T. Hightower is president of WisdomGroup, creators of outstanding web-based software. WisdomGroup leads the open source user group ChicagoRuby.org, and we created the WindyCityRails conference. For more information, visit WisdomGroup.com.

We all know people who talk a good game. But we admire the ones who achieve results. Athletes who break records, pianists who move us with their music, teachers who ignite the spark of learning within us… all of these are people who execute and excel. Companies that execute are admired as well.

So if we know what execution looks like, why is it so hard to achieve? Why is it that some companies execute well while others die? Execution, the book by Ram Chanran and Larry Bossidy, examines a wide spectrum of companies and presents lessons learned from companies that execute well.

Execution is Not Grunt Work

One problem in poorly-executing organizations: Leaders view execution as something to be delegated to others, while the leaders focus on “bigger” issues. Nonsense, say the authors. High-performance companies have an execution mindset embedded in their DNA. Once properly analyzed, the execution mindset can be extracted and duplicated in other organizations.

Components of Execution

The authors of Execution have spent decades running and advising large, multinational companies. They have extracted the discipline of execution from their real-world experience, breaking it down to three essential processes:

• People
• Strategy
• Operations

The People Process

Bossidy and Charan regard the people process as the most important of the three. When you recruit and train the right people, they will create executable strategies and convert them into successful operating plans.

Leaders can best influence the people process through their behavior. “What you do speaks so loudly that I cannot hear what you say,” goes the mantra. The authors list seven things a leader must do as part of the people process:

• Know your people and your business.
• Insist on realism.
• Set clear goals and priorities.
• Follow through.
• Reward the doers.
• Expand people’s capabilities.
• Know yourself.

Know Your People

When a high-performance person is presenting a business case to company leaders, he wants to be quizzed in detail about his work. The questions should not take on the flavor of an interrogation, but rather a dialog between colleagues who are challenging each other to grow.

Leaders who know their people and the business will know how to ask incisive questions. The presenter is ready for the test, and a leader who is execution-minded will give him the chance to shine while still pointing out areas needing additional growth.

Realism, Goals, and Priorities

Stretch goals. Eighty-hour work weeks. Missed vacations. Are these the signs of achievement, or a prescription for burn-out? Clearly, such stress behaviors are the pathway to burnout.

When leaders set goals and priorities that are based on the realities of the marketplace, people on the team are more productive. And productive people achieve goals (even stretch goals) without burn-out.

Follow Through

Goals are meaningless if people don’t take them seriously. If you announce a new productivity initiative, be sure to follow through with measurements and rewards for the top performers. Otherwise, your next initiative is likely to be greeted in a “ho-hum” manner as the next fad of the month.

Great People Want to Grow

There’s a difference between giving orders and teaching people how to get things done. When leaders actively look for opportunities to coach, people have opportunities to grow.

A core coaching skill: Asking incisive questions that force people to think. Many times, incisive questions force the leader to think as well, and the whole team grows stronger as a result.

Developing Emotional Fortitude

All of us need frank feedback from the people around us if we are to grow. Responsibility for frank feedback falls heavily on leaders and coaches.

Some leaders avoid giving frank feedback during employee evaluations. Why? Basic human nature. We all want to be liked. But if being liked means that your people never receive honest feedback, is it worth it?

Execution-minded leaders have the emotional fortitude to give honest feedback. They can focus specifically on the issue at hand without resorting to personal attacks. When an execution-minded leader uncovers a shortcoming in performance, he looks at it as an opportunity to coach, not to scold.

The Strategy Process

Jack Welch, former CEO of GE, has been known to say “If you want to grow long term, you have to eat short term.” A great strategy wins customer in the short term and the long term.

A great strategy is not a bunch of numbers on a spreadsheet extrapolated for ten years with a year-by-year “growth factor.” A great strategy comes from the minds and experience of the people charged with its execution, the people recruited and trained as part of the people process.

Realism: Tough Questions

A strategy must address the “hows” of execution. Otherwise, it’s a fantasy, not a strategy. One way to keep a strategy grounded in reality is to ask tough, incisive questions such as:

• If we’ve tried this before and failed, how have circumstances changed to raise the odds of success?
• Are our people trained in the key areas required by the strategy?
• How are competitors likely to respond when we execute? How will we respond to their response?
• Does government regulation play a role in our success? If so, are we subject to a government timetable?

A good strategy is like a roadmap. Since nobody can predict the future, a sound strategy will give the organization plenty of room to maneuver when faced with unanticipated obstacles or opportunities.

Strategic Success

Some strategies are destined to fail because they are born without the execution mindset. Stretch goals ignite the imagination and they get people pumped-up at company pep-rallies. However, moral can nosedive when the grandiose goals are not achieved. Companies that execute well know how to build realistic and achievable strategies that excite people and move the company toward its goals. Once the strategy has been developed, it’s time for action.

The Operations Process

All planning must eventually degenerate into work, as Peter Drucker said many years ago. In the operating plan, the people (from the people process) take the strategy (from the strategy process) and break it down into actionable steps and deadlines, thereby creating the operating plan.

Credenza-Ware

So often strategies and operating plans are developed, printed, inserted into three-ring binders (or PowerPoint presentations) and quickly forgotten. The printed documents become credenza-ware, those beautifully-bound books that sit in executive offices, un-opened because everyone is running around putting out fires.

Part of execution is opening those binders and putting the good strategies and operating plans to use. A good operating plan is all about follow-through and results.

Conclusion

Execution is a discipline which must be practiced on a consistent basis if benefits are to be realized. People, strategy, and operations must all be aligned and focused on company goals. Companies that execute produce outstanding results.

Suggested Reading

Execution: The Discipline of Getting Things Done, by Larry Bossidy and Ram Charan. Bossidy is the former CEO of Honeywell and the leader who instilled the discipline of execution within the company’s culture. Charan is a sought-after consultant and business thinker who coaches CEOs along the path toward execution.

About the Author

Raymond T. Hightower is president of WisdomGroup, creators of outstanding web-based software.

Mention the word “innovation” to some people and high-tech companies may come to mind. Some think of Google and Facebook as innovators. People from an earlier generation may regard the works of Apple and Microsoft as innovative. Beyond the tech industry we may look to Disney as an innovator.

Innovation is nothing new. Successful companies (and organizations) have had to choose innovation or death since the dawn of civilization.

Innovation vs. Luck

Some organizations are innovative, while others are just lucky. How can you tell the difference? I would submit that longevity is a great divider between true innovators and those who are just lucky. An organization that generates new ideas time after time breaks the statistical rules that define luck. These are the organizations worthy of study.

157 Years of Innovation

Corning entered the glass business over 150 years ago. At that time, the art of glassmaking had remained largely unchanged since the time of the Roman Empire. Glassmaking was a craft, an art handed down from father to son for generations, and glassmaking techniques were closely guarded secrets.

Corning changed that. Corning introduced science to glassmaking. Over the past century and a half they have experimented extensively and documented thoroughly. The results are glass innovations we see today:

• Fiber optic cables that shuttle gigabits of data throughout today’s Internet.
• Large, flat-panel computer displays that use less power than older monitors while reducing eye-strain.

To explore innovation at Corning, we’ll take a closer look at a few Corning innovations from the 1800s and 1900s that are still in use today: stones in the glass, the ribbon machine, and joint ventures.

Stones in the Glass

Glassmakers melt silicon and pour (or blow) it into molds to create useful shapes. That’s an oversimplification, but it serves the purposes of this article. Glass melts at very high temperatures. One big challenge faced by any glassmaker: building a furnace that won’t melt. If the heat of the molten glass melts the furnace, the product and furnace are both destroyed.

In the early 1900s Corning searched aggressively for a high-temperature furnace material. Researchers believed that new and interesting glass products could be discovered at higher temperatures.

One day, after a fresh batch of glass had cooled, the Corning researchers noticed something disturbing: stones in the glass. Somehow, impurities had crept into the molten glass and when the glass hardened, the impurities were trapped inside.

Problem or Opportunity?

The stones in the glass appeared to be a problem until the researchers thought about things from a different perspective. The stones were intact. Whatever the “stones” were made of, they were resilient enough to remain intact while the glass was melted. If the researchers could isolate this material, they might be able to use it to build high-temperature furnaces. The researchers managed to isolate the newly discovered material, and it served as a lining for Corning’s furnaces for many decades after that. Pyrex, the glass that chemists take for granted today, was born in the new high-temperature furnaces.

General Electric Needed Bulbs

Thomas Edison’s General Electric Company was an early customer of Corning. Edison needed an enclosure for his new electric lights. Glass seemed to fit the bill.

At the time, glass bulbs for Edison’s new lights were blown by hand. This presented a problem as the demand for light bulbs increased because Corning couldn’t find enough human glass blowers to blow the bulbs fast enough. Further, when humans create simple, specialized products there are always slight variations in quality and dimensions that may render the product unusable.

So the Corning engineers had a new problem to solve. How could they make bulbs faster and with the right dimensions every time?

Making Light Bulbs

The Corning engineers first attacked the problem by studying how the glass blowers blew the bulbs. Then they tried to duplicate the human process with machines. The result: Failure.

Birds vs. Airplanes

Early airplane designers experienced the same kind of failure when they first tried to fly. They tried to mimic the wings and flapping motion of birds, and the result was failure.

However, the Wright brothers achieved flight because they looked at the problem from a different perspective. Keep the wings still, and move the air with an engine. Birds don’t fly that way. But today, that’s the way that millions of people fly around the world every day. Airplanes don’t mimic birds. They take a different approach, and they fly higher and faster as a result.

The Ribbon Machine

Back to making light bulbs. The engineers took a new approach. They threw out everything they knew about light bulb craftsmanship, and they started from scratch. The result was the ribbon machine, a device capable of producing bulbs at the rate of over fifty thousand units per hour. The ribbon machine was Corning’s key machine for making light bulbs for over six decades.

Human Skills Needed

Didn’t the ribbon machine put glassblowers out of work? Actually, no. Glassblowers were given other tasks that required special human skills. Through most of the innovations in glass technology, Corning maintained good relationships with the craftsmen and artists who fashioned the glass. Skilled workers in other industries rebelled against innovation because they feared losing their jobs to new machines. Corning’s artisans embraced the new technology because the company had other more advanced tasks for them to perform within the company. The more mundane tasks were relegated to machines.

Joint Ventures

Corning competes with glass companies many times its size. The company’s strength lies in its ability to create intellectual property and to profit from it. Other companies recognize this strength and they readily partner with Corning in joint ventures. Dow-Corning and Owens-Corning are two examples. The Corning company figured out how to establish and maintain positive relationships with other companies long before the term “joint venture” was coined.

One reason for Corning’s attractiveness as an innovation partner is their stubborn insistence on investing in research and development, regardless of economic outlook. Many companies look at R&D as something to cut when times get tough. But for Corning, investing in R&D is part of their DNA. As a result, Corning always has something to offer when other firms come looking for a JV partner.

Conclusion

The Corning story is remarkable not only because of their recent innovations (fiber optics, LCD panels). Corning has consistently functioned as an innovation factory through two world wars and multiple CEOs. The light bulb, telephone, radio, television, airplane, and computer have all received a boost from Corning’s innovation engine. Corning consistently plays a role in the history of this country and the world. What a powerful source of inspiration.

Suggested Reading

Corning and the Craft of Innovation, by Margaret B. W. Graham and Alec Shuldiner.

About the Newsletter Author

Raymond T. Hightower is president of WisdomGroup, creator of web-based software applications.

Traditionally, a killer app is a computer program so useful that it justifies the purchase of an entire system all by itself. A popular example is the electronic spreadsheet (like VisiCalc or Microsoft Excel) that enables accountants to perform a full week of number crunching in seconds.

A New Definition

Larry Downes and Chunka Mui, authors of Unleashing the Killer App, employ a different definition. They argue that a killer app:

• Is offered by your company instead of an outside software publisher.
• Establishes an entirely new product category in your industry.
• Disrupts and displaces older offerings from you and your competitors.
• Generates several hundred percent ROI.

The Creation Process

Downes & Mui go beyond the definition to guide the reader though a killer app creation process. A few of the process guidelines will be discussed here:

• Outsourcing to the Customer
• Creating Communities of Value
• Replacing Rude Interfaces
• Giving Away Information

Outsourcing to the Customer

Many US companies have outsourced manufacturing to China and tech support to India. Another party stands eager to receive outsourcing opportunities from your company: your customers.

Customers are the best customer service representatives when they are given the right tools. FedEx.com is a great example of customer outsourcing. When a package “absolutely, positively, has to get there overnight,” visit FedEx.com to create & print your own shipping label. Drop the label on the standard FedEx envelope and your package is ready to go.

When you do this, you have essentially performed the functions of the clerk at the FedEx office, and you’ve paid FedEx for the opportunity. Even better: Customers enjoy paying FedEx for this service because it means that the package gets sent quicker with fewer addressing errors. Customers will perform outsourced tasks when it means greater control and better service.

Tools for the Customer

To outsource to the customer, build an interface into your information systems and grant access to your customers. FedEx already had the shipping system in place, complete with bar code readers and tracking software. After they added a customer-friendly Web interface (with proper security restrictions) they were ready to go.

How much time will your order entry department save if customers can enter their own orders through a Web-driven interface?

Creating Communities of Value

Travel agents have watched their world change drastically in this era of easy access to flight information. If you can go online yourself to compare your own hotel rates and book your own travel directly with the airlines, why do you need a travel agent? You don’t, unless the travel agent provides more valuable services. Travel agents that only focus on low-value mechanical tasks are no longer in business. The travel agents who excel today go beyond the mechanical tasks that customers can easily do themselves over the Internet. Great travel agents create communities.

Backroads Offers “Active Travel”

Downes and Mui are customers of the Backroads travel company. The Backroads community site, MyBackroads, is a password-protected area where travel enthusiasts can share experiences with like-minded adventurers. For those who just want to book a flight, a simple airline site will do. But for people who want to book “more rewarding alternatives to traditional vacations,” MyBackroads offers a personalized online experience and an opportunity to swap advice with others who have similar travel interests.

The value of the MyBackroads community lies in the network. Many people join because they want to meet people who are already there. Backroads provides a place for them to “meet” online, and the members add value through their presence and interaction. Customers will pay a premium for good communities.

Replacing Rude Interfaces

A customer shopping in a department store experienced a particularly rude interaction with a clerk. After paying for the purchase, the customer said to the clerk, “A thank you would be nice.”

“It’s written on the receipt,” responded the clerk.

A machine could never be so cold. One solution to the customer service problem is to create better interview screening techniques, and better customer service training for employees. Another solution: Figure out how to supplement customer points of contact with computer interfaces, while still maintaining customer intimacy.

Grocery stores now provide self-service checkout lines to ease traffic congestion. Clerks are freed to provide higher value services to customer, such as assistance with product selection.

One personal experience: This author shops at one grocery store consistently because of one clerk, a woman who always offers good advice on what fish to buy that week. How many other customers return to this grocery store because of this clerk’s advice? Could she offer this added value service if she was tied to a cash register?

Capture & Recycle the Bits

Building a computer interface for customers enables companies to capture information as digital bits. The next step is to multiply the value of the information in new and creative ways.

For example, if you send flowers to a friend via 800flowers.com, the company retains information about your order. The system captures the information once, so that next year the system can dash you an email reminding you of your friend’s birthday. How friendly, and how profitable! The arrangement is good for the buyer who doesn’t want to forget the friend’s birthday. And it’s good for the florist who makes a sale that might have been missed. Everybody wins.

Giving Away Information

Sharing information forms a bond. Withholding information tends to draw people apart. Once your company has gone through the effort and expense of creating new information, the marginal cost of giving it away over the Internet is zero. Then why not give it away? The New York Times recently halted all paid subscriptions to the online version of the paper. Reason? They had enough traffic to generate substantial revenue from advertising on the site. Increasing traffic by eliminating the subscription fee will serve to increase advertising revenue even further.

Contrast that against two services that provide information to the legal and journalism industries: Lexis/Nexis and Westlaw. Both companies are leaders in legal research. The problem? Each has spent so much time reacting to the moves of the other that they have failed to notice a third competitor overtaking them: Google.

Google’s mission is “to organize the world’s information and make it universally accessible and useful.” Google’s searches are free. Lexis/Nexis and Westlaw both require subscriptions because that’s how they’ve always done it. Subscriptions are firmly entrenched in their revenue models. Yet Google generates more revenue through advertising. Google gives away information, and they’ve grown to be the leader in search as a result.

Will Lexis/Nexis and Westlaw still exist in ten years?

Conclusion

What does all of this mean? How can you create killer apps in your company?

The twelve-step process outlined by Downes and Mui is a good start. At the same time, we must remember that killer apps are about disruptive technology. If we could see the next killer app clearly, it wouldn’t be disruptive (by definition).

Since you can’t predict the next killer app, the authors recommend the next best thing: Create an environment that serves as fertile soil for killer apps. Rapidly prototype many new ideas at once. When one idea fails, learn from it, and apply what you’ve learned to your next project.

Designing a killer app involves predicting the future. In doing so, we might remember the words of computer industry pioneer Alan Kay: “The best way to predict the future is to invent it.”

Suggested Reading

Unleashing the Killer App – Digital Strategies for Market Dominance_, by Larry Downes and Chunka Mui.

About the Author

Raymond T. Hightower is the president of WisdomGroup, a Chicago-based information technology firm.

We’ve seen it before: A new idea comes out of nowhere and takes off. “Why didn’t I think of that?” we might ask ourselves. It happened in the late 1800s with railroads and telephones, and in the 1900s with automobiles. Today it’s happening with technologies related to the Internet.

The Tipping Point by Malcolm Gladwell takes a close look at ideas and how they spread. This newsletter will extract a few key points from the book. Some of the author’s ideas apply directly to business success.

What is a Tipping Point?

A tipping point is the moment when everything changes at once. It’s a moment of critical mass, a threshold, a boiling point.

Tipping Point, Boiling Point

What happens to water heated to 200^0 Fahrenheit? Practically nothing. It’s just hot water. What about 210^0? Still nothing, and nothing again at 211^0.

But as soon as we hit 212^0 Fahrenheit, something powerful happens. We get steam. Steam to drive locomotives or turbines for electricity. But if we travel one degree below 212^0, all we get is hot water. The tipping point between water and steam is 212^0 Fahrenheit.

Two Simple Questions

The goal of The Tipping Point is to answer two simple questions:

• Why is it that some ideas or behaviors or products start epidemics and others don’t?
• What can we do to deliberately start and control positive epidemics of our own?

Ideas As Epidemics

One way to understand the proliferation of fashion trends, the transformation of unknown books into best sellers, and the phenomenon of word of mouth is to think of them as epidemics. This comparison might seem strange until we discover that both events are driven by the same math.

• Three characteristics of epidemics are observed:
• Contagiousness.
• Small causes, big effects.
• A tipping point – a single point of sudden, dramatic change.

Epidemics Are Contagious

An epidemic disease may start with one person and eventually reach thousands. On the positive side, an epidemic idea can start with one small group of people, and then spread around the globe.

Coughing is a very simple example of contagiousness. Behavioral scientists have observed that coughing is contagious. If you hear a person cough, you might feel inclined to cough yourself. Reading the word cough will cause some people to cough. Sometimes one can induce coughing in another person merely by writing the word cough.

Small Cause, Big Effect

The math of epidemics violates common sense. People by nature want to believe that there is a direct linear relationship between cause and effect. But epidemics don’t work that way. Epidemics follow the mathematical laws of geometric progression.

Take a look at the example below. If you start with a penny and double it every day, how much money do you get? “Common sense” tells us one thing, but the laws of mathematics tell us the truth. Geometric growth seems to violate common sense, and we can leverage that “violation” to our advantage.

In the world of ideas, what happens if a person with an idea tells two people about it? What if each of them shares the idea with two of their friends, and so on? The same geometric growth applies.

How to Make Ideas Tip

Now that we’ve observed the tipping point phenomenon, how do we make the idea work for us?

It all depends on people. Yes, the math works. But in order to make an idea tip, we must enlist the assistance of three special groups of people. Gladwell calls them connectors, mavens, and salesmen.

Connectors Know Everybody

Connectors are people who seem to know “everybody.” We all know somebody like that. Walk down the street with a connector and they always seem to run into someone they know. One famous connector played a pivotal role in the American Revolution.

Midnight Connections

Many of us learned that Paul Revere rode through Massachusetts shouting “The British are coming” to warn early Americans of the impending British invasion. Revere’s midnight ride is credited with alerting our militia early enough to defeat the British in the first battle of the American Revolution.

Few people are aware that another rider, William Dawes, made a similar ride along a different route on the same night. The difference? Virtually nobody responded to the call of Dawes, and his name has been lost to history. Why?

Revere the Connector

Paul Revere was a connector, and William Dawes was not. Dawes was typical of most people: acquainted with a few folks in his immediate neighborhood. When the time came for him to warn others of the attack, Dawes was stymied. Especially since the warning came in the middle of the night.

Revere, on the other hand, knew everybody. He was active in professional, religious, and social societies in the Boston area, and he had acquaintances in the surrounding towns. When Revere rode into a town, he knew which houses to go to (at midnight) and whom to awaken. The people he woke up welcomed his message because they knew his character from previous dealings. As a result, the young American colonies were alerted to the coming British attack, and we won the first battle of the Revolutionary War.

Mavens Store Information

Mavens are storehouses of information. Mavens are experts. If you’re planning to buy a flat screen TV, you seek advice from the friend that reads all about flat screen TVs just for fun. She’ll give you the scoop on all the manufacturers, retailers, features, and defects.

Mavens typically won’t share what they know unless they’re asked. Further, they’re so busy gathering and learning new information that they don’t have much time to promote what they know. Mavens are linked by connectors to our third group of special people: salesmen.

Salesmen Spread the Word

If you’ve ever met a person who bought a new computer and refused to shut up about it, you’ve met a salesman. A salesman who has discovered a new product or service that he likes feels compelled to tell others about it, regardless of personal gain. It’s just in his nature.

In summary, mavens gather new information about products and services, salesmen tell the world about it, and connectors link everybody together.

Leveraging What We Know

Marketing to everybody everywhere is very, very expensive. It’s far better to leverage what we know about our three special groups of people, and help them do what they do naturally.

Mavens Crave Information

Identify the mavens among your customers and make it easy for them to get information about your products.

Microsoft does this very well with the Microsoft Certified Partner program. For a small annual subscription fee, IT mavens receive a copy of every software package produced by Microsoft. Mavens love this. When the time comes for an IT maven to recommend software to friends and clients, she’ll go with what she knows.

Connectors Crave Contact

Connectors, by nature, are self identifying. They may seek you out! The key is to give them something to connect to, and a reason to come back and connect again.

Apple does this very well with user groups. The company doesn’t run the groups; each group is autonomous. The groups are a great place for connectors to meet each other and form alliances that will strengthen the message for your product.

Salesmen Crave an Audience

The latest soapbox for salesmen: Blogs. Google your industry and you’ll certainly see bloggers promoting their point of view.

With bloggers, make sure they have access to up to date information through your web site and other means. If your product warrants it, make video demonstrations available that the bloggers can link to or embed in their own sites.

Conclusion

As with any effort involving people, results can never be guaranteed. However, by understanding the theory of The Tipping Point, we can certainly raise the odds of success.

Suggested Reading

The Tipping Point: How Little Things Can Make a Big Difference, by Malcolm Gladwell.

About the Author

Raymond T. Hightower is the president of WisdomGroup, a Chicago-based information technology firm.

If your business uses Web-based software (also known as webware), you will hear about Ruby on Rails. This newsletter will answer three questions:

• What is Ruby on Rails?
• Why do you care?
• How can you benefit?

What is Ruby on Rails?

Ruby on Rails (“Rails” or “RoR” for short) helps developers write better webware in less time. Clients appreciate results, and Rails enables developers to deliver in a big way.

RoR consists of two components: an object oriented programming language called Ruby, and a Web development framework called Rails.

Ruby: The Language

Ruby is the object oriented language dominant in Rails applications. Many developers believe that software written in object oriented languages is easier to maintain.

Your company can benefit from the object oriented approach because easier maintenance means a longer, revenue-generating lifespan for your webware.

Wikipedia.com has a great discussion of object oriented languages for those who want more details.

Rails: The Framework

One of the best ways to define Rails is to describe the problem that it solves.

The problem: Creating a Web-based application can be very time-consuming because of all the details that must be tracked and managed.

As users, we take well-built webware for granted. However, every element of every page must be clearly defined and thoroughly tested before users visit the site. Every text box, every drop-down arrow, every data field (credit card number, expiration date, etc.) must be programmed and thoroughly tested before any users visit the site.

Rails Automates Repeated Tasks

Rails automates time-consuming, repetitive tasks (things that were once done manually) so that developers can focus on solving problems for your business.

Here’s an example from another profession. Can you imagine an accountant’s life without a spreadsheet like Microsoft Excel or Lotus 1-2-3? Maybe you don’t have to imagine! You might recall the days of paper spreadsheets, pencils, and 10-key hand-cranked calculators.

Rails is to software developers as electronic spreadsheets are to accountants. Both tools make their respective professionals more productive by eliminating repetitive tasks (grunt work).

Limitations of Rails

Rails and spreadsheets both eliminate grunt work. At the same time, they both have limitations.

Neither is a replacement for rational thought. For example, knowing how to use a spreadsheet won’t make you an accountant because you still need to understand tax law and discounted cash flow analysis.

Likewise, a developer who knows Rails must also understand object oriented programming and relational database theory in order to create a workable piece of software.

A spreadsheet won’t make you an accountant, Rails won’t make you a Web developer, and a big hat in Texas won’t make you a cowboy!

Other Options

By the way, there are other frameworks. There are other languages. Rails is the latest in a long line of tools designed to make programmers more productive. History shows that the tools will continue to improve over time.

Why Do You Care?

You care because in the end, results matter. Further, if there’s a way for your developers to achieve better results with better tools, then tools matter too. Rails is not a panacea for all Web development. You’ve heard the saying “If the only tool you have is a hammer, every problem looks like a nail.” Be sure that the developer you choose understands the tool in use and why it was chosen. This may save you headaches in the end.

Evaluating Developer Skills

One good way to measure your developer’s skills: Take a look at projects the developer has completed in the past. Were the clients satisfied? How did the developer handle problems? A good developer, like a good craftsman, will be willing to talk to you about tools and methodologies. The more comfortable you are with the developer and the tools, the greater the chances of project success.

As of this writing, Wisdom has three Rails applications under development. You can check our web site for real-time information about our Rails applications.

How Can You Benefit?

Maybe you can’t. Some business processes are best handled by off-the shelf software. Bookkeeping, for example, is one area where there’s a penalty for creativity so it’s better to do what the government and your investors want you to do.

But keep this in mind. If you’re running your most critical business processes with off-the-shelf software, so can your competitors. A company that does not stand out from its competitors runs the risk of being commoditized. And all commodities are subject to low profit margins.

Good Ideas, Amplified

Good ideas are amplified when implemented in good software. If you have a bold & innovative business idea, if your idea can be monetized, and if your idea is so unique that it does not exist in off-the-shelf form, then custom Webware in the Rails framework might fit you.

One More Thing…

Rails is a tool for creating webware, and webware runs virtually anywhere! Rails applications are designed to run inside a simple web browser like Microsoft Internet Explorer or Apple Safari. You can even find browsers on personal digital assistants (PDAs).

Imagine the benefit of using the same business software on your PC, Macintosh, and PDA! No new interface to learn, and no special installation steps for each platform.

Advantages of Webware are discussed further in the 2Q2007 issue of The Wisdom Report entitled Webware ROI.

Suggested Reading

Programming Ruby by Dave Thomas. Anyone who wants to write Rails code must know Ruby. This title is available in paper form and as a downloadable PDF from the publisher.

Agile Web Development With Rails by Dave Thomas, Mike Clark, and several other authors. This title builds upon the Ruby book above. Also available in paper and PDF formats.

About the Author

Raymond T. Hightower is the president of WisdomGroup, a Chicago-based information technology firm. Wisdom creates information technology solutions (using Rails and other platforms) for growing businesses.

Two decades ago, mainframe and midrange computer makers sat idly by as PCs emerged and eventually dominated the IT market. This author sold midrange systems for a large computer company in the 1980s. At one client site, my $120,000 midrange solution went head-to-head against something called a local area network (LAN). I had vaguely heard of LANs and the company that eventually dominated that market, Novell. As my father used to say, I was about to “get my head whupped” in a big way.

LAN Beats Midrange, Lesson Learned

I lost that bid. The solution presented by my competitor offered similar functionality at one third the cost of my solution. I hated losing at the time. But in hindsight I must say that the client made a good decision. IT must serve business goals, and it’s all about ROI.

The Lesson Repeats

LAN applications challenged mainframes back in the 1980s. Now LAN apps are stalked in an aggressive way by newer Web technologies.

Pundits have many names for the new stuff: Web-based apps, Web 2.0, Software as a Service (SaaS), and so on. Of course, the name we choose is not as important as what the application does and how it serves your business. IT must serve business goals.

One thing these new buzzwords all have in common: They all involve some aspect of the Web. For this article, we will use the term Webware, as coined by the team at CNet and Webware.com.

Because It’s the Web? No.

Let’s not get hung up on the idea of doing Web based software just because it’s on the Web. There’s a perverse human tendency (especially among tech people) to gravitate to something new regardless of how useful it really is.

The most important statement in IT: Information technology must serve business goals. Technology for technology’s sake might be cool, but it’s not necessarily the best path to positive ROI.

Cycle of Achievement

Companies are always looking for ways to boost revenue. The most successful companies do this through business innovation: Creating newer & better ways to keep their customers happy and coming back for more.

Technology is an enabler for innovative ideas. For example, book stores sold books in the same way for thousands of years until Amazon.com turned the business model on its head. Borders and Barnes & Noble had to step up or die. Web technology changed the book business forever.

At the same time, the book business drives Internet technology. As more people purchase online, our need for tougher security increases.

So business innovation drives technology, and technology drives business innovation. It’s a powerful cycle of achievement. Everybody wins.

Webware is a recent result of this cycle. Business needed better tools, and technology has stepped up to deliver.

Before Webware

Most business software today is designed to run in a client/server environment. A chunk of the software sits on each user’s workstation (client) and it communicates with a chunk of software somewhere on the network (server). The problem: In order to make the software work, a tech must install the client-side software on each and every machine on the network. This is a very time consuming process.

When it’s time to update client/server software, the tech must first update the server, and then update every client on the network. A special version of the software must be written for each type of client (PC, Mac, Linux, PDA). Or the IT department must force all users to run the same platform, typically Microsoft Windows.

Webware is Different

Webware is designed to operate within a simple Web browser. If the software is written properly, any computer that runs a Web browser gets to use the software. Some browsers even run on hand-held personal digital assistants (PDAs).

The server software is written to work like the Web sites that people use every day, with one key difference: business logic is built into the site. The business logic can be designed for any of several functions, including accounting, customer relationship management, scheduling… anything that the business needs. And if it’s web-based, any user running a proper web browser can be productive.

Easy Installation & Updates

Installation and updates are easy because every machine sold today comes with a pre-installed Web browser. So when it’s time to install a workstation, you unpack it from the box and plug it into the network. That’s it. No client-side software to install. And if the software breaks, move to another browser-equipped PC. As far as webware software is concerned, every PC (or Mac or Linux box) is the same.

Try Webware Now

If you’ve ever used Web-based email offered by Gmail, Yahoo, or Hotmail, then you’ve had a glimpse of Web-based software. You can run a Web-based word processor or spreadsheet at http://docs.google.com. Yet all of these only scratch the surface of what this technology has to offer.

Where’s the Data?

That depends. Some businesses choose to put the server for their Webware in-house. Others choose a hosting service. That decision largely depends on the technical skill-set within your company, the speed of your Internet connection, and the amount of time your team spends using the data outside the office. There are several “right” answers.

Suggested Reading

Wikipedia, specifically the Web Application article.

Suggested DVD

Triumph of the Nerds, narrated by Robert X. Cringely. Favorite quote by Oracle’s Larry Ellison: “It’s bits. You don’t but bits in plastic, plastic in a box, drive the box to the store and put it on a shelf. It’s bits. You put bits on the Internet so people can download the bits.”

About the Author

Raymond T. Hightower is the president of WisdomGroup, a Chicago-based information technology firm. Wisdom creates information technology solutions for growing businesses.