How intelligent is your company?

Gone with the wind... blindspots and Skype

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Last winter, I was approached by one of the major investors in Skype, who thought that the research I have done on strategic blindspots would be very valuable for the new team leading Skype's strategy. I got very excited by the opportunity- not only do I use Skype, but I believe the company has succeeded in touching its customers in a rare and intimate way...


The company has succeeded in building with its customers in a rare, intimate relation

As a customer, my appreciation of the products runs very deep because Skype has changed my family in many ways:

  • After our move, allowing my son to continue connecting each week with his friend. Every Sunday at 7PM, they meet on Skype, exchange Pokemon cards, trade the latest joke, and occasionally share a game of chess or battleship. Skype has become the friendship line.
  • Enabling our 98 years old grand-mother, to see her grand grand children in Vancouver and talk to them for the first time. They baked her birthday cake and blew the candle in front of her. Many tears. Priceless.
  • Allowing my husband to share his experience on his many long distance trips. He once walked throughout downtown Shanghai to show the kids what his work is about. Great learning.

As a result , we are very faithful customers. We registered for four full world subscriptions, use Skype for conference calls regularly, and even have equipped our home with Skype real phones allowing us to flawlessly make calls on Skype. Skype is on our iphones, ipads etc...


Hitting the wall of corporate assumptions

Yet, my first conversation with the young analyst working on the turnaround of the company did not go well. After a short introduction of my work around strategic blindspots, he kindly suggested that

  • Skype had a strategy
  • It was not going to have to change much
  • The focus in the next 12 months would be on implementing the strategy already defined a few months ago rather than trying to see if there might be new competitors stepping in

It was clear in my mind that he was blindsided, so I said I would hear from him in 6 months...


When competitors from outside your industry are stepping in

I did not have to wait that long. In the past couple of months, the competitive arena Skype had owned for several years has suddenly opened up:

  • After the launched of Google Voice , Google announced last August the launch of Google Voice in  airports and universities ( see full story here)
  • Rumors are spreading that Facebook is secretely building a phone (see full story here)
  • Twitter, and other social networkds still resonate from the consumers' comments ( see example here)
  • Analysts are now speculating that the company might be acquired by Cisco ( see analysis here)

 

 

Skype's blindspots

This example illustrates some of the most classic blindspots. While the company is claiming that its technology is superior, there are signs that its technology is outdating rapidly:

  • Poor connections: a random survey of business users revealed that although they would use Skype for short business conversations, the technology is never reliable, and they would not use it for an important call with clients
  • File sharing: Skype is very proud of offering the ability to do multiple users conferencing and sharing of documents. Well, Webex was already doing this for over  10 years now...
  • Avatars: Skype offers today about 100 avatars. Yet, Skype figures are closer to Super Mario than Avatar. In 2010, and in the year where Avatar was launched, 5 years after the beginning of Second Life, there is no excuse any more for offering to your clients such outdated models
  • Gaming: Why should a user, when playing games with friends on Skype, have to tweak the camera to see at least part of the board game ?
  • Etc...

Remember that this overstatement of competence is not unusual. In fact, surveys show that 80% of annual reports claim the company is a leader in its industry ... (go and check yours !)


Where blindspots come from

Management, smart executives, get into a typical pattern:

  • Management machismo: as described by McKinsey in an earlier article (see Hidden Flaws here)
  • Arrogance: as the company claims that "Millions of individuals and businesses use Skype to make free video and voice calls, send instant messages and share files with other Skype users." (Skype's website), this does not means the numbers will hold in the future
  • Lack of frame of reference:David Gurlé, Vice President and General Manager for Skype for Business, has more than 17 years of telecommunications experience. Would this biase his view of the product ?


Avoiding blindspots

A few simple frameworks and exercices can help the executive team and the investors avoid blindspots:

  • Challenge unchallenged assumptions: list all assumptions / taboos in your company or industry, then systematically question them: "What if ..."
  • Broaden the industry definition: by a series or reiteration, one can artificially enlarge the definition of its industry, therefore putting on the map potential competitors that would typically not be included in an environment scan. It also offer numerous opportunities to find growth paths, and challenge one's business model
  • Enlarge the frame of reference of management, by injecting expertise from significantly different industries and experiences


In conclusion, a few ideas for Skype going ahead

Here are a few ideas for Skype's future strategy:

  • Why not open up to your world of users the ability to develop real, 3D figures as avatars ?
  • Open up to the community the ability to develop Skype apps- very much in the same model Apple has done it with iTunes
  • Embed Skype in all trains, cars, buses
  • Allow a complete integration with the desktop, the ability to share documents, edit and collaborate
  • Flawlessly embed other tools within Skype - why not the Web so that web pages can be searched and shared while calling?
  • Embed the most popular board games so that the next generation grows up with Skype
  • Build on this intimate relation built with customers on a personal level. Isn't it remarkable that none of that is transpiring through the company's site ? It's all about the million users, and none about the stories - those personal experiences and testimonials

 

More ideas ? Share them here in the comments below ... I'll forward them to Skype !

 

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