The Trust Channel

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The Postal Service can continue to evolve and operate more like a private-sector business.” ~ Megan J. Brennan, New Postmaster’s Goal: Act Like Private Sector, WSJ.com

Trust – Postal Service’s Greatest Asset

For centuries postal services in every country across the globe have aimed to serve the people by being the trusted guardians of the written word. From innocent sentiments of a child for Santa in North Pole to private, legally binding documents of multi-billion dollar conglomerates, the Postal Service has dutifully transported and delivered messages.

Although times have changed, our need for a trusted channel to communicate has not.

In fact, the need for Trust Channel has only multiplied as new technological methods of communications like Twitter, Gmail, Facebook and even LinkedIn have come into existence. These multi-billion dollar giants of communications are trusted by people from all walks of life, each one attempting to demonstrate their worth, originality, ideas, thoughts and, on occasion, dissatisfaction… all things that make us human.

These channels play on our fundamental need “To Belong” within a virtual world that attempts to expound voices of billions of people. Nothing wrong with this at all except when more than one person speaks at the same time, it becomes extremely noisy in real-time digital communication.

Inter-human communications, as we all know, is far more complex than the latest trending topic on many social media networks.

Now more than ever, there is a fundamental need to be ‘heard’ …not by the mass of invisible crowds but by the few you would like to address, privately without third party monitoring of your communications for monetary gains.

And the only entity that can still fulfill this need for private and trusted communications between people and businesses is the Postal Service.

Conflict – To make Money or Serve the People

Neither the need for a trusted, private communication channel; nor the benefits of advanced technological communications can be fundamentally denied. They are both equally important to modern communications.

Yet these two concepts remain mortal enemies in today’s digital world.

Why?

One problem is ‘Data’. Data, it seems, is the source of golden nuggets that must be mined for intelligence to make money. And, there is nothing wrong with this at all. Twitter, Gmail, Hotmail, Facebook, LinkedIn and many other communication entities attempt to gather data, buy and sell data, mine data, add to data, statistically manipulate data, react to data or otherwise use it to make money. Without data, social media networks would not be worth billions.

So what can reconcile the delicate balance between the need for private, trusted communications between people and the need to use technological communications to make/save money?

Only an entity that does not have a required obligation of pleasing its investors and at the same time serve the fundamental need for private and trusted communications between citizens can fulfill this need.

This balance can only be achieved if an entity is mandated to serve the people first and the market needs second while sustaining the strength of people’s trust.

Can the answer to this paradox still be Postal Services?

Opportunity – Industries that Serve People

Need for private and trusted communications that is not intervened by third party monitoring is paramount in today’s technologically advanced world. Electronic communications is no longer private in any form. The only security measures holding back intervention in individual communications is the sheer volume of data available and, of course, whether the information gleaned from the data is really worth any money. Sometimes the effort is worth it but in most cases finding the golden nugget has been extremely costly.

But this is no guarantee of privacy or trust in electronic communications. It seems to be more luck of the draw than secure, trusted communication channel.

So where in the marketplace is private and trusted channel of communication still required:

Financial Services

Banks and its customers (business and consumers) require a means to communicate highly private and secure information on a daily basis in real-time. From discussion about which account number to use to what amount of money needs to be transacted to which billing account number to debit…are all highly sensitive information that require private, trusted and secure communication channel.

Medical Services

Individual medical records are private and should be private between physician and the patient. Only a secure and private communication channel can ensure that this remain such.

Legal Services

Legal records are also private unless they are legally required to be disclosed. Once again a need for private exchange of information is necessary to ensure that trust is reinforced between the legal system and the people.

Identity Services

The records of your existence are private and trust-bound. These records should remain yours and any communications associated with these records should remain within the control of the holder of identity—you.

For the longest time Postal Services have handled these documents and records within the security of its Trusted Channel. And the practice still continues worldwide.

Evolution – Innovation in Trust

Imagine the Evolution of The Trust Channel.

What if it was no longer necessary to worry about privacy and security when instructing your financial advisor about your decision on financial management through a secure email?

What if you could view your medical records online with absolute knowledge that no one but you and your doctor knows your medical conditions? What if you know which doctor has access to your records and you own the ability to block them if you don’t trust them or their judgment?

What if you and your lawyer can discuss your pending legal matter without worrying about privacy?

What if you and your government have a private and trusted channel to communicate about your passport renewal?

What if….

Fact is that there is absolutely no other entity out there today that can own and manage The Trust Channel other than an evolved Postal Service without compromising itself on the alter of privacy invasion for the purpose of making money. Only a service with a clear mandate to first serve the people and not the money can do this job.

Even if a new innovative, entrepreneurial company builds a super secure and private communications technology to be used for Trust Communications, it will eventually become part of a private enterprise that wants to make money from your private information. Case in point, PasswordBox being acquired by Intel’s Safe Identity Organization. PasswordBox was a great company with approximately 14 million downloads and as Intel evolves the technology to integrate it into its own solutions, it would be interesting to see how data is used.

Actions – Re-Modelling the Business of Postal Services

Postal Services are no strangers to innovation and risk-taking as they have been addressing the issue of shipping and delivery for centuries. Well before Amazon’s drone delivery services, Postal Service was experimenting with human-powered drone services. Here is a picture of Autogyro from 1930s piloted by John Miller demonstrating shuttle mail delivery to Washington D.C.

Autogyro

Source: Library of Congress

Perhaps, it is time to rejuvenate the spirit of innovation once more and re-consider how Postal Service business model should serve the people and businesses. The opportunity does not solely include mail delivery and parcels, it spans into meeting the need for trusted, private and secure communications for foundational businesses and people across the globe.

As USPS has already demonstrated, Postal Services should partner with the private sector, enable new communication technologies, address the problems of modern retailers, and rebuild the foundation of The Trust Channel once again.

Private sector technology and government entities should not be enemies.

We are not enemies, but friends. We must not be enemies. Though passion may have strained, it must not break bonds of affection. The mystic chords of memory will swell when again touched, as surely they will be, by the better angels of our nature.
~ Abraham Lincoln

There is no perfect business model or solution for modernization of Postal Services but it is worth searching for one to keep the trust of the people.

The answer may be found in balancing two extreme principles that at first seem to be mortal enemies in digital world:

making profits vs. serving the people.

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OPEN WRX Consulting Inc. is committed to helping companies improve competitiveness through effective decision making by applying strategy to tech solutions, building plans that create value and sharing knowledge that drives innovation.

openwrxconsulting.com

 

Smart City: If you build it for the People, they will come

Smart City

Government needs to take a lead in removing barriers to innovation and facilitating collaboration between multiple diverse actors. ~ The Smart City Market

Challenges of building a Smart City

Smart City efforts are being initiated by cities across the globe. Regardless of the size of effort and investment, enabling smart technologies at large scale have a number of challenges.

Here are some issues outlined in assessments by Gov.UK:

  • A lack of funding for multiple Smart City initiatives
  • Creating a common and long term vision that is sustainable across government agencies regardless of who is in office
  • High cost of investment in new technologies and its implementation
  • Collaboration across different procurement and agency policies to ensure high volume cost savings for technologies and associated services
  • A common user experience and transparency across services regardless of type of service, whom it serves and which agency manages it
  • Common understanding of privacy, data management and safety policies across agencies
  • Regulations and legislation that encourage innovation and facilitate growth while serving citizens and businesses alike
  • A business model that serves the needs of citizens first

Barcelona has created a Smart City PMO (Personnel Management Office) which coordinates all the projects in the city that are classified under the smart city tag. This has meant transitioning from silo’d work to “transversal” work. The city has produced an early strategy document which attempts to set up the basis of the smart city strategy in the city. Ms. Lopez Ventura claims: “I think that this change to get all departments working towards the same strategy is quite new.”~ Global Innovators, International Case Studies on Smart Cities

A Model for Innovation and Collaboration:
Major League Baseball Internet and Interactive

MLB.com was originally created by investments from 30 team owners and a mandate from the league with a total cost of $77M. Originally, it built and managed a common user experience for all baseball fans while pursuing digital revenue streams including ticket sales, subscriptions, sponsorships, merchandising, etc. MLB.com also has a media channel called MLB Advanced Media (MLBAM) centred around the game of baseball across all media channels and devices. Estimated value of IPO in 2005 for MLBAM was $2.5 Billion. Current estimates are not available as MLBAM has no plans to go public any time soon.

So what makes MLB a model for innovation and collaboration:

  • MLB Interactive has one coherent mission mandated by the league and agreed upon by team owners:To be the internet and interactive branch of baseball league.
  • It collaborates with
    • players
    • owners
    • leagues (including NBA)
    • tech partners (Apple)
    • non-tech partners (cities across North America)
    • non-tech branches (MLB retail)
    • television and radio
    • online media
    • gaming partners
    • music bands
    • sports networks
    • and more…
      to generate revenue and serve the fans.
  • It serves all segments of baseball fans…from season ticket holders to fringe fans who occasionally dip into the game on their mobile devices.
  • It is autonomous in its decision making about technology investments and innovation.

Without question, BAM’s success stems in part from its autonomy. “It’s unlike other things in baseball where someone is meddling,” says Gary Gillette, coeditor of ESPN’s Baseball Encyclopedia. Bowman, who answers to a board of club owners, is free to make decisions about pursuing new devices or new technologies. ~ MLB Advanced Media’s Bob Bowman is Playing Digital Hardball. And he’s Winning

  • It is innovative in both identifying opportunities to serve baseball fans and in creating new ways to enjoy the game. A good example is PITCHf/x.
  • They build technology for the digital fans. User experience spans all devices, technologies and use of data to enhance the experience.
  • Cost is managed centrally thus allowing for better assessment of investments in technologies including ROI.

BAM’s business is more multifaceted than YouTube’s; [in 2009], it sold more than 35 million MLB tickets, more than half of the league’s inventory. It streams more live video than any other spots entity — and any other company ~ MLB Advanced Media’s Bob Bowman is Playing Digital Hardball. And he’s Winning

  • Privacy and data management policies are all led centrally and the fans are never in doubt about safety.

The MLB internet and interactive business has grown to BAM proportions simply because it sits outside the game. Yet it still serves the game, the stakeholders and ultimately the fans using the latest smart technology.

MLBAM on CBS Segment

Click to Watch

Challenging Status Quo Models of Smart City Initiatives

Building a Smart City is not a two-term proposition. It is an ongoing effort to change the way city folk live and work by actively using smart technologies on a daily basis. Smart City effort requires not only an innovative and collaborative effort from inside different government agencies but also a willingness to engage and serve citizens transparently and work with partners across the public/private horizon.

Mr. Godfrey, Government CIO for Hong Kong Smart City initiative explains “The vision is that our clients should find the government service as convenient, as efficient, as pleasurable to use as the best services they get from the private sector. ~ Global Innovators, International Case Studies on Smart Cities

MLB demonstrates a model for collaboration and innovation in technology all while serving fans with unforgettable experiences that are emphatically rooted in tradition as they often are within a city.

Smart City effort should be approached in the same way. An independent partnership between government agencies that are looking to use smart technologies to improve the experience for their customer: The citizens of a Smart City.

Why? Because it will enable:

  • Singular accountability with multi-agency, business and citizen stakeholders
  • A common vision of success across agencies and for perpetuity
  • Autonomous decision making by singularly accountable
  • Common and transparent experience for citizens across services
  • Cost consolidation, driving ROI and investment transparency
  • Integrated technologies across agencies with citizen-focused delivery
  • Common privacy and data policies across agencies
  • A need to drive collaboration and innovation to be successful
  • Serving the direct customer: Citizens of Smart City

The real challenge for Smart City initiatives is to find the balance between

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UPDATE: December 11, 2014
HBO to Use MLB Advanced Media for Stand-Alone Streaming Product
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OPEN WRX Consulting Inc. is committed to helping companies improve competitiveness through effective decision making by applying strategy to tech solutions, building plans that create value and sharing knowledge that drives innovation.

openwrxconsulting.com

Innovation vs. Automation: Digital Business Model

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It’s not enough to make a difference on product quality or delivery readiness or production scale. It’s important to innovate in areas where our competition does not act. ~ CEO, IBM Global CEO Report

Innovation in Business Models

Innovation in business model drives the creation of new markets and/or increases existing ones. Companies like Apple, Gillette and Priceline have expanded their markets by changing their business models to include new markets, selling products in pieces or creating new opportunity through closer relationships with their suppliers.

The truth of the matter is that there is no one single formula that can be used to innovate a digital business model.

In fact, there is no single definition or framework in existence today that can guarantee executives a path to success when it comes to business models. Even the definition of business model itself is disputed by academics and managers.

Regardless of this ambiguity, managers know that innovating business model delivers gains that are unprecedented. And they also know that technology has made it possible to deliver results faster and with far less investment than was previously possible.

Apple Xpansion

Source: Creating Value Business Model Innovation, MIT

Stop Thinking Automation

Many businesses are spending significant amount of dollars to transform physical components of their businesses to digital ones. As they digitize, they are simply taking products or services they already have and automating them for digital channels like mobile, web and phone. Unfortunately, status quo product and service automation will not be enough to drive a meaningful change in their business for the long term. And here is why:

  • Automation is easily replicated by competitors and works to decrease switching costs for customers.
  • Automation creates another layer of complexity on top of existing systems rather than attempts to build a new core digital business that creates new markets.
  • More technological complexity in the infrastructure means higher security risk over time. As technology advances so do the threats and vulnerabilities for the old technology that still remain the foundation of an automated digital business.

Start Thinking Digital Innovation

Digital innovation is not about executing a roadmap made up of series of projects that lay out a layer of new technologies on top of old. It is about creating new markets and expanding the existing business by investment in new technological solutions. This means that managers have to push the boundaries of ‘business as usual’ and work to radicalize their way of thinking.

Here is one suggested path you can take to innovate your digital business model.

Begin with Core Principles

Digital business model innovation should begin with a thorough understanding of the core economic principles upon which the business is built. And where can these principles be found? They are stated in the mission and vision statements for your business.

A mission or vision statement is the first step in understanding what your company believes is at the very core of the business. These core statements are generally created with great care and intensity by senior managers of the company. To start here would be to understand the heart of what is most important.

Of course, what is at the heart of a business can vary from company to company. Some companies are concentrating on products, others are passionate about customer relationships and still others emphasize process. Regardless of what the core principles of your business is, digital business model innovation can take the core to the next level of expansion.

From this centre, the work on digital innovation can move to other domains, markets, technologies, etc. as you explore both external and internal possibilities of expanding your business.

Here you are limited by only two things: i) your imagination and ii) what you can build.

I. Play with Imagination

Design

Developing many possibilities or scenarios based on imagination is the necessary first step. This is the design phase of your innovative digital business model. This is an opportunity for you to thoroughly explore the possibilities without restrictions. Don’t let practicalities hold you back at this stage of game. Doing so may be exercising the circular reasoning of self-defeat.

Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.” ~ Albert Einstein

It is important to create a safe environment for this exercise. The naysayers are a necessary part of the process and they help check the realities of ideas but not during the design stage. Fact is that the imagination can easily be quashed by reality and yet it is imagination that can open up new opportunities for the business that would never have been considered before.

Design phase is the one place where everyone can make mistakes and get away with it. The leader for this effort should ensure that the rules of exercising innovation sessions are well-understood.

Here are some high level examples of how financial services can imagine their digital business models:

Models that centre on Situations

situational

Models that centre on Segments

segment

Disclaimer: Above are only preliminary ideas and require further regulatory and technological due diligence to be functional.

II. Plan to Win

Planning is an important part of defining how the innovative business models should work to increase the pie. The process of planning is systematic and will help think through how customers will be served, how revenue will be generated, what will the costs be. Business Model Canvas is a great place to start thinking through a detailed plan for your new business models. Below is a brief video that explains the Business Model Canvas and here is a downloadable doc that gives even more details on the process.

In addition to Business Model Canvas, there is a great compilation of different types of digital business models currently operating documented by Professor Michael Rappa from University of North Carolina. This resource can also help in the Designing phase to kick-start discussions of innovative business ideas. The categories of different digital business models described on the site can provide a foundation for what type of business innovation makes sense for your business. Or even generate a new economy or disruptor.

Create Innovation Mindset

To create innovation mindset in the technology communities of your enterprise, there has to be a deliberate and purposeful effort to drive opportunities for innovation thinking. You might consider the use of a facilitator/consultant who can help accomplish this safe environment for imaginative discussions.

I have facilitated many sessions, from process mapping workshops to developing game plans for digital channels. In every case, the participants are more than willing and able to discuss a new future for their companies. I find that individuals who work in technology selected this career path because they believe in a better future filled with new innovative technologies that solve problems.

Additional Resources

Digital Disruptors: Models of Digital Operations, Part 2/3 Digital Business Transformation
This is a good summary of various aspects of digital business model.

How Kodak Failed
A great article in Forbes that provides a view into decision making process that led to the demise of Kodak, the inventors of digital photography. A ‘what not to do’ guide.

What can a CIO do to drive Digital Transformation?
HBR Digital Innovation and Transformation blog site where there are many searchable blogs about different aspects of Digital Business Models and Digital Transformation.

Defining the Business Model in the New World of Digital Business
An academic index on all the different ways a business model can be defined. It is a great summary and an attempt to define the concept of Business Model.

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Update: October 14, 2014

A great presentation by Didier Bonnet from Capgemini on the need for Digital Business Model Innovation at Oracle OpenWorld keynote:

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OPEN WRX Consulting Inc. is committed to helping companies improve competitiveness through effective decision making by sharing information and generating ideas.

While my passion is business strategy and technology, my work spans a number of corporate disciplines including product development, process design, marketing and financial analysis. I was a Consultant at CIBC and Sr. Consultant at Innovapost where I had the pleasure of working with clients at Canada Post and Purolator. I also worked as a Digital Strategist for NBA, Kraft, Samsung and Travelex. My experience spans from start-ups to Fortune 500 companies.

openwrxconsulting.com

Strategic Planning: Why Boeing wants to do it like #AppleLive

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“Rather than take on expensive, gargantuan projects like the 787 Dreamliner, which CEO Jim McNerney characterized as ‘moon shots,’ he said he wants Boeing ‘to be more like Apple’ with its carefully planned development strategies on successful product launches.”The Street 

Start At The Top

Image

ImageApple has traditionally used “stories” to communicate Mission and Vision statements to the world. These statements are specific, achievable and realistic. The words are simple and easy to understand.  Everyone knows what Apple means when it says “high quality” or “low cost” or “easy to use” in reference to Apple products. Apple’s statements hone in on “products” and “customers”.  Both employees and business partners get it and without asking the question: What do you mean by….?

Recommendations:

  • Mention products and customers
  • Keep it simple
  • Be realistic
  • Tell it like it can be done by anyone
  • Do it like it can’t be done by anyone

Build Products Like it’s The Only ONE

Apple is master of design. Design thinking rules the culture regardless of function.  New product ideas become an internal ‘start-up’ and report directly to executive team on progress. A detailed product development plan is created based on Apple New Product Process that lays out stages, responsible people, and when each stage is to be completed. Exec Team reviews progress every Monday on each of the new products. The “EPM mafia” is engaged. This includes an engineering program manager and a global supply manager who work together to produce a product with ‘what is best for the product’ in mind. Once built, the product is tested. If it is not ‘right’, it is sent through the production process again. Each iteration of product is reviewed by Exec Team and commented on. If it is unsatisfactory…it is sent back for redesign and production. Packaging is designed and tested after production cycle is complete. ‘Rules of the Road’ provide a framework for every stage of release of the product to the public. More info available in Inside Apple: How America’s Most Admired–and Secretive–Company Really Works by Adam Lashinsky.

An overarching competitive advantage Apple retains that others in the industry have not been able to replicate is CULTURE OF LOYALTY. Interestingly enough, this loyalty permeates not only Apple’s employees but also its customers. This is why Apple customers line up to buy new products. The law of Scarcity working overtime. (Check out today’s #AppleLive event line up)

Recommendations:

  • Don’t let realities like costs hold design back
  • Exec team must be directly involved
  • Prototype and test, repeat
  • Be physically there on the production floor for every prototype
  • Inspire Loyalty from managers and employees

Taking New Product to Customers

Product launch is not a function at Apple, it is a company wide event that unfolds on Apple fans and bystanders alike. It is the best example of “Social Proof” enabled by a company. Many tech companies including Microsoft and Alibaba now mimic Apple’s product launch. And it works!

Rumours also play an important role in spreading news before it actually happens. Recently Apple has been in the news about devices that will enable Healthy Living. And the news is so well permeated in the media that the rumours alone fuelled a tech surge in the markets.

Recommendations:

  • Build a cult following for your products
  • Spread rumours about what you are working on
  • Have a party at new product launch!

SWOT Analysis

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Financials

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Source: WSJ.com

 

Market Share

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Source: Bloomberg

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Kiran Sohi’s career has focused on leading companies to success by enabling strategic decision making. While her passion is Strategic Planning, her work spans a number of corporate strategy disciplines including IT, marketing, finance and operations.

Prior to finding OPEN WRX Consulting, Kiran was a Strategic Planning consultant at CIBC and Business Consultant at Innovapost, where her clients included Canada Post and Purolator. She also had the pleasure of working as a Digital Strategist for NBA, Kraft, Samsung and Travelex.

Visit openwrxconsulting.com for more info.