Live At Impact 2011: Forbes’ Publisher Rich Karlgaard On Beating The Economy With IT

It’s around 1:42 on Tuesday here at Impact 2011, and I’ve not left the Venetian Biosphere since I arrived here on Sunday.

Scott and I have continued to do our live webcasts from the expo floor.  You can find both the live and Memorex sessions at www.livestream.com/ibmimpact (and feel free to stop by…just look for the big, bright light in the corner).

I blogged the general session featuring IBM Senior Vice President Steve Mills’ comments on business agility from earlier today.  You can find that post here.

I’ve also attended some sessions of the Forbes Leadership Summit, a few thoughts from which I thought would be worth sharing here.

In a session yesterday, Rich Karlgaard, the publisher of Forbes magazine, set up the Summit with some comments about the state of the economy…such as it is.

Karlgaard explained that the economic recovery has been uneven and rocky at best, and that the last three years in particular were so traumatizing, it’s impossible to do a forecast, as we have no faith in the underlying economy.

We are, collectively, suffering from Post Traumatic (Economic) Stress Syndrome.  Nice one.

It’s like a roller coaster ride.  A few months ago, GDP projection was 2%.  Then most everyone had a good Christmas and the stock market grew, and so forecasts went up to 3.5% GDP growth for Q1.  Then, Tunisia…Egypt…Libya…Japan earthquake and tsunami…gas went up….well, stuff happened.

So, the recovery is very uneven, which means…you guessed it: The companies with the right technology investments or business processes will do much better than GDP (5%…maybe 10%), and those who don’t…well, they’ll likely do much worse. This is the nature of recoveries that follow big, traumatic economic events (Just glance back to the 1970s: Nixon resigning, oil crisis, Carter’s malaise speech).

And yet, the 1970s produced (other than disco) Federal Express, Southwest Airlines, Apple Computer, even Microsoft…so though economists may have looked upon the 70s as poor economically, it saw a lot of business growth, and in particular those who were new and innovative.

It was then that Karlgaard launched into the meat of his pitch: Eight key focus areas of companies which will best adapt to this new economic environment.

1. Those good at design (well designed products and services)
2. Speed (Table stakes).  Fast go to market, with the perfect products at the perfect time when customers need them.  Get to those customers willing to pay the most first!
3. Cost.  Always a factor.
4. Supply chain and logistics. Every great leader in its field is generally the supply chain leader (Sam Walton, Wal-Mart, by way of example). Wal-Mart was the first to figure out the power of linking information from bar code back to IBM mainframes, which gave them enormous competitive advantage early on.
5. Analytics.  Just Google “IBM Business Analytics” to learn more about this one.
6. External and Internal Communications.  He used an example of ex-IBMers use of Facebook as a powerful advocate community.
7. Brand — Particularly, three dimensional brands (phony ones are easily exposed in the social media). 2D brands could only be gotten away with in the Mad Men era.
8. Foundation of Moral Purpose — The trust level have with institutions is at an all-time low.  Companies that have solid foundations also have unsurpassed advantages.

Got it?

Live From Impact 2011: IBM Software’s Steve Mills On Business Agility

Katie Linendoll, the “chic geek” technojournalist for both CNN and CBS, spiritedly kicked off today’s Impact 2011 morning keynote.

Scott and I had the pleasure of interviewing Katie yesterday afternoon for Impact TV, whereupon Katie went out of her way to give Scott a hard time about his pad and paper “Think” pad (Us cool kids both had iPads, albeit mine, a 1st generation, Katie’s the iPad 2).

Katie explained that for today’s session, we were going to focus on the how of building towards business agility, and then promptly introduced IBM Senior VP, Software and Systems, Steve Mills.

Steve had also joined us for an Impact TV interview, on Sunday, and continued to relay to the gathered 8,000+ member audience some of the key messages he had communicated during our interview.

In his comments, Steve pointed out for the audience how well received the IBM customer participation in both keynotes and breakouts has been, and he highlighted several in his talk: Caterpillar, NY State Tax Authority, Isbank (in Turkey), all of whom have realized great efficiencies and agility via business process management.

Mills explained that over the past decade, we’ve collectively been on a journey with SOA to build towards business agility, seizing the opportunity to leverage open standards and start to build more horizontal business processes that were no longer isolated to vertical applications.

SOA, Mills explained, has been about trying to unlock those applications and assets which define your business and the particular processes that make your business run, but that you can’t get there without unlocking your own data and assets.

But Mills also pointed out that there’s not a lot of new things in IT.  Watson, for example, the computer system that recently took on and beat “Jeopardy!” world champions, is not 4 years old. “There’s over 40 years of IT science behind Watson.”

Applause from the Impact audience. Mills continued: “The last four years were really fun. The past 40 were really hard.”

Business agility requires a robust SOA infrastructure, Mills explained, and we at IBM have worked on helping build a complete infrastructure because we understood our customers wanted to tie a lot of services together and to have flexible, high-performing infrastructures.

This, in turn, could help organizations build less, reuse more, and realize significant economic benefit by bringing down the cost of execution (Most businesses today spend 70-80% of their resources managing the runtime of thousands of programs).

Mills comments about the backstory of SOA served as a perfect segueway to the customer story video Katie introduced about how the City of Madrid built a coordinated emergency management response system after the horrible 2004 bombings there, and is now realizing a 25% faster response time for emergencies (and improving all the time).

And, to Phil Gilbert, IBM VP BPM, and his demo of the new IBM Business Process Manager.  Gilbert observed that there are $1T in losses in process inefficiencies every year, and yet both good and bad events have increased in both severity and frequency.

Citing Alfred Sloan, former CEO of General Motors and process improvement guru, he explained that “good management rests on decentralization with coordinated control.”

IBM’s approach to BPM can deliver such coordination.