Revelations about Apple and Google tracking the movements of mobile devices has caused quite a stir. It seems their mining of data and ability to construct complex algorithms that can predict future behavior incited outrage on the part of privacy and civil rights groups. In a bit of a twisted irony, it turns out that the very apps that have enabled smart phones have also provided a wealth of data for inquiring minds who want to know.

The confluence of social media and cloud computing is shaping a new world order, where marketers have access to relational databases and a litany of information that has until now been seemingly unfathomable. The implications are extraordinary, as emerging technologies will propel mind numbing analytics about how we work, live and interact.

Consumers are fearful of things like electronic medical records which evoke an emotional response about our privacy, even though they are nearly certain of advancing medical science and improving patient outcomes. Business owners must embrace the potential of a new universe of analytics that will open a window to insight on customers unlike any we have ever seen.

The current debate centers on whether such mining is legal and ethical and how it could be abused. Attorneys search the Facebook pages of potential jurors to determine their biases. Cellular phone providers track which users are most likely to switch carriers based on the behavior of their friends. While these unseemly usages of data may threaten our sensibilities, social norms are shifting to the point that privacy is becoming an expectation of a past era.

Physicists at Northwestern University tracked the movements of over 100,000 people and 16 million records, and assert that they can predict (within 93% accuracy) the location of a user at a given time in the future[i]. Those with an entrepreneurial bent will find productive uses of such information and will find legal ways to exploit it. Microsoft, Apple and Google rank in the top 10 amongst the world’s most valued companies because they are the ones that allow us to organize our information.

Those seeking competitive advantage will invest more heavily in technologies and analysts who not only tell us how our customers have behaved but how they will behave in the future, and react to the stimuli we produce. Decisions ranging from inventory selection, marketing spend, labor utilization, etc. will be driven by more precise data, promoting further improvement in U.S. productivity.

The use of such data will become the keys to the castle.  As Bill Gates once said, “be nice to the nerds, chances are you’ll end up working for one.”

[i] The Really Smart Phone by Robert Lee Hotz Wall Street Journal April 23, 2011

“A wise man learns more from his enemies, than a fool does from his friends”

Baltasar Gracian

While details of Osama bin Laden’s capture are sketchy, one thing that is clear is that the U.S. military executed a nearly flawless raid with pinpoint precision.

For me, the most interesting revelation this week was that the CIA had intelligence about bin Laden’s Islamabad hideout as early as August of last year. The intelligence was seemingly developed over years of digging, prodding and fact finding, which eventually yielded a tip about one of his handlers.

While the bravery of the team that struck the compound is absolute and unquestioned, we should be equally impressed with the methodical approach exhibited by our military command, who demonstrated remarkable patience and fortitude. It seems that every detail of the strike was planned meticulously.  With the lives of American soldiers at risk, no detail was left to chance.

Strategy and tactics are born out of military doctrine, and the ability of operatives to plan their attack preciously, and execute flawlessly should give us pause.  The operation lends credence to the notion that any strategy is only as good as that tactics that support it, and that execution of bad strategy can yield devastating results. It is often necessary to have a well thought out contingency plan in the event of a calamity, such as a helicopter being caught in a “vortex”.

Both strategy and tactics are reliant on good information, and to act prematurely without knowing the facts will often generate a less than desirable outcome. As Stephen Covey points out, part of our time we spend planning, and part of it reacting. The greater the time we invest in planning, the less total energy we must expend. Whether it is in the military or business, the cost of a failed strategy can be high.

Once strategies (which is best defined as which battles should be fought) are determined, an organization must develop core competencies and resources to support them.  While the US of A may have taken a hit in recent years, we still have the finest technology and training in the world, and our enemies should still be weary of that lethal combination.

The Wall Street Journal reported that that CIA Chief Leon Panetta thought that there was a “60% chance” that bin Laden was actually present in the compound. Clearly, the decision to strike took guts. Intelligence officials and the military developed the best information available, planned the attack and took a calculated risk.  For that, our nation is eternally grateful. We should run our businesses with a similar level of preparedness.

Tuesday’s WSJ pointed out that Wal-Mart is experiencing its second consecutive year of lackluster sales[i]. Historically, the world’s largest retailer has exploded in downturns, and held its own in upturns. Its expansive international growth has been a boon over the last decade.

While many focus on Wal-Mart’s controversial practices, the company is viewed as a leader in everything from sustainability to inventory management. Yet it seems that Wal-Mart has lost its way. In its zeal to reform retail, the company may have overstepped with customers. Consider the company’s initiatives towards organic foods, clearly a misread of customer wants at a time where value oriented shoppers could not afford to pay a price premium.  Former Wal-Mart executive Jimmy Wright said “the basic Wal-Mart customer didn’t leave Wal-Mart; Wal-Mart left the customer.”

Target has done an outstanding job carving out a market with offers that resonate with their more metropolitan and suburban shoppers.  Wal-Mart’s efforts to go more upscale with fashion plays right into Target’s hands; a key strategic mistake.  Pricing may also be an issue, as Wal-Mart has moved away from Sam Walton’s “Always Low Prices” stance with more “high-low” pricing strategies that would be more akin to a traditional supermarket chain.

It seems that Wal-Mart has lost sight of its core strength. There was elegance to Wal-Mart’s no nonsense approach to mass merchandising.  Stack it high, sell it cheap and do it more efficiently than everyone else. It was a formula that put the supercenter format on the map. Wal-Mart just got too hip, too trendy and too cute.  Maybe they have too many MBA’s complicating things.

The lesson in all of this is that whatever you do to evolve in your business, one still has to stay true to the core. You can never forget what your guiding principles are.  Don’t get too cute.

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[i] Adapted from Mr. Sam’s Winning Formula by Miguel Bustillo, WSJ 2/22

As the sequel to Wall Street; Money Never Sleeps returned to the silver screen last week, we are reminded of how morally inept wall street has become. Evidently, greed never sleeps.

I was mortified by a story last week regarding the battle for supremacy in the grocery space.  WalMart is perusing legal action after the Wall Street Journal published an article accusing Safeway, Supervalu and Ahold of colluding to oppose various WalMart sites throughout the country. Particularly egregious is the claim that the chains have hired a third party (the Saint Consulting Group) to oppose development of “big box stores”.

While details are sketchy, it would not be hard to assume some of the tactics that were employed such as opposition based on environmental or economic impacts. WalMart has certainly been accused of its own anti-competitive tactics. But doesn’t this sound like dirty pool?  Aren’t these the same objections that opponents would use against grocery retailers? Just because you are having your lunch handed to you by a competitor does not justify conspiring in a covert manner to oppose their expansion.  There is no room in a capitalistic society to do business this way.

In my years as a vendor in the grocery industry, I witnessed all types of unseemly behavior including a time when a salesman asked if he could bring a particular associate (who was an attractive woman) to a meeting at the request of a buyer (I said no). Every company must find its moral center.  Stated values are important as they describe how we are expected to behave.  Corporate Directors and executives must set the tone. If organizations are unseemly at the top, they will only be less responsible throughout the organization.

Make sure your organization stays within its moral center.

Source: WalMart Tries to Unmask Foes- WSJ 9/22/2010