What Mitt Romney Could Have Learned from EMC's Joe Tucci
Nov 19, 2012 5:00 AM PT
We've had a couple of weeks to think about the election outcome, and both sides are positioning the results around the issues. This has become so divisive that there is a significant move by Texas to exit the United States and become a country.
I've spent some time looking at this, and the real reason the Republicans lost is that the Democrats used data analytics to win a race that by the numbers, they should have actually lost. However, by taking advantage of analytics, they were able to harvest donations more effectively, align with issues that people cared about more passionately, and get their voters out more successfully than their opponents.
In short, while Romney was positioned as the better manager, Obama's campaign was better managed.
In the tech world, every large firm is becoming vertically integrated, but EMC stands as one of the few remaining examples of the old model, and it is performing better than most of its peers. It is doing this largely due to its own implementation of data analytics, and had Romney used the same approach that EMC's CEO Joe Tucci does, he would have won.
I'll focus on that this week and close with my product of the week: the electric Super Scooter from Current Motor, which I've been driving for the last couple of weeks. Oh, and this scooter was co-developed by Dell.
Winning or Losing Through Data Analytics
Big Data is the new analytics buzz term that every big company is pushing. Used properly, it can give you unmatched insight into your operations, into your customers, into your competitors, and into your environment.
Sun Tzu, the first great strategist to be published, said the general who knows himself and his opponent best will always win. Data analytics, done right, is the lever that can lift even the smallest company to success.
Now the problem with analytics is that it is actually very new, and few people are trained in how to do it right -- and even fewer on how to use the results to win. In fact, work in this field over the last five years has been devoted mainly to building these tools and making them function correctly -- not to training managers how to use them.
The other problem is that we are creatures of habit, which means we tend to do things the way we have always done them. Generally it is the new employees coming into a company who drive change through new technologies.
My generation drove PCs and client server computing into business; the current generation coming out of college is driving analytics.
How Romney Lost
This showcases how Romney actually lost. Both campaigns used data analytics heavily, but Obama used a vastly different approach. He brought a young team on board two years before the election to build an integrated data analytics department, hire analysts internally, and make sure not only that the system would put out accurate information, but also that the campaign would use that information effectively.
Romney outsourced this effort to two large firms, apparently paying far more than Obama for the effort. However, those firms didn't understand politics, and the effort wasn't integrated into the campaign management system. For starters, the numbers were unreliable. Worse, Romney's campaign managers were inclined to use traditional, even more-unreliable sources to make decisions.
That is why at the end, the election confirmed Obama's projections and was well off from Romney's. Obama's campaign not only had more accurate numbers. It also did a better job deploying its limited resources and turned what should have been a losing position into a winning one.
Tucci and EMC
I was at EMC last week and what I found was that even though EMC is not on the same path as most of its peers, the firm is better managed -- and at the core of this was an early recognition of the power of analytics. EMC applied the tool internally first to better anticipate parts failures in its installed base. The results were so amazing, the company ended up buying Green Plum to build those results into a product.
EMC since realized it could use this same tool, much like Obama, did to instrument its customers, and it currently has them accurately classified into three categories: loyal; at-risk; and trapped.
The company now knows which customers to leave alone, because they are happy; which customers to resource because they are about to leave; and which customers need to be shown the value of their solutions so they don't feel trapped. EMC can selectively target problems product by product and customer by customer.
In addition, it can monetize each customer so it knows which are the most valuable and which are unprofitable, allowing them to embrace the former more tightly and push the latter off to competitors. This is such a powerful tool that virtually every time it is disclosed to a customer, the customer wants EMC to help it deploy something similar.
Recently, the executive that created the solution, Jim Bampos, was shifted from driving the solution internally to selling it externally as a result of massive customer demand.
The real kicker is that EMC is about to be able to do the same analysis on competitors' customers so that they can better target their sales people and avoid wasting time on customers that are loyal; capture customers that are at risk; and develop programs to free customers that feel trapped.
The reasons behind both of the latter groups' complaints will be put into marketing programs to increase impact. Based on the stats, Oracle, which has the largest group of trapped customers, should be very worried.
One recent example of how this helped EMC competitively: The stats showcased that the trend toward offshore support to cut costs was stupid. It caused such high customer dissatisfaction, the money saved was a fraction of the potential lost sales, so Tucci's team reversed this decision.
Many managers initially resented being forced to do something different, but once they realized it made them more successful, they became believers. Pat Gelsinger, one of the smartest guys in the technology segment -- he currently runs VMware -- immediately saw the value and became a huge supporter of the effort. If Intel, where he was one of the CEO contenders, had used a similar process, it would have been far more successful.
Wrapping Up: The Power of Analytics
I started out with a love of numbers, and for a good chunk of the time I was in IBM. I marveled at -- and was frustrated by -- how often executives in a firm that basically made massive calculators didn't use them, to their eventual regret.
IBM fell into decline while I was there, largely because executive management was completely in the dark with regard to what was going on with customers and the market. At the time, IBM had a high percentage of very unhappy trapped customers and a very ineffective sales force due to some incredibly foolish compensation decisions.
Obama won an election that he should have lost, largely because he had better intelligence than Romney, which enabled him to better utilize the resources he had. EMC is using this same method to successfully buck the trend to go vertical, leading to more loyal customers, stronger partnerships -- it analyzes partners now, as well -- and much stronger solutions.
In the end, it appears Sun Tzu was right, and intelligence is at the core of a winning strategy -- and big data analytics is at the core of intelligence.
Product of the Week: Current Motor Super Scooter With Dell Technology
What if a technology firm built a car? This used to be kind of a joke, with Bill Gates arguing that if Microsoft built cars they'd be flying by now, and the auto industry arguing that they'd likely crash often -- which come to think of it, would be extremely problematic if they flew. Well, the first vehicle jointly developed by a tech company is in market, and I've had one on loan for a couple of weeks.
The Current Motor Super Scooter, jointly developed with Dell, is a ton of fun to drive, and I think it is a far more reasonable choice than an electric car at the moment. This is because scooters can use HOV lanes and work better in traffic -- although electric vehicles suck at being freeway cruisers or long-distance vehicles. This is because they have short ranges; get better range the slower they go; don't charge quickly; and there is as yet no charging infrastructure to replace gas stations.
The ideal use is for commutes under 20 miles in traffic -- otherwise known to a lot of us as the daily commute. As I think back, this scooter would have been far better than the motorcycles I owned when I was in school, because it provided better protection, was less likely to get me into trouble, and I wouldn't have had to pay for gas. It wouldn't have been much for dates, but then neither were the motorcycles.
My experience with the scooter has been amazing -- and because it is silent, you not only enjoy what is going on around you more, you can better hear cars in your blind spots. I do miss having a radio, though.
It basically has a tablet as a dashboard, which means it can load apps for navigation, trip planning and other stuff. I wonder how long before someone figures out how to integrate an iPad? This also means that Current Motor can monitor the bike and see problems before you do, and that a built-in On Star-like feature is likely in its future. (It is connected to the cellular network.)
Would I buy one? Yes, but not likely the value one that I was loaned -- they are going to switch me out for the performance version. This is because in California, speed limits are more like suggestions. At the bike's 58 MPH top speed, I often have cars glued to my rear fender, which is a little troubling. The performance version has more range and a top speed closer to 70. Starting at US$10K, the bike isn't cheap, but it is far cheaper than the only electric car I'd ever consider -- the Tesla -- which typically comes in closer to $80K, properly configured.
The Current Motor Super Scooter is an amazing bike. It actually got me riding again, I want one, and it is my product of the week.