Systems thinking

A system is not just the sum of its parts, but the product of their interactions. So, the best parts do not necessarily make the best system. Rather, the ability of a system to achieve it’s purpose depends on how the parts manage to work together, not just how they perform individually. If you apply it to people or teams, the model is a clear exponent of the value of collaborative action and coordination.

Systems thinking looks at organisations as systems and analyses how the parts interrelate and how the organisation as a whole performs overtime. A good example to describe this is Lance Armstrong’s Tour de France victories between 1999 and 2003, where he won each year, but never won more than a few of the daily stages (below see daily stages won each year out of total stages).

1999: 4/21; 2000: 1/21; 2001: 4/21; 2002: 4/21; 2003: 1/21

More on systems thinking from systems dynamics guru Jay Forrester. Also read more on Theory of Constraints, Limits to Growth, Shifting the Burden, Five Whys

The dry clothing conundrum

Sublimation is the process by which a solid changes to a vapor (or gas) without passing by a liquid state. For example, the transformation of ice to water vapor and vice-versa.

In psychology it is a defense mechanism by which unacceptable feelings or behaviour are manifested in a constructive manner. Freud discussed it as a process of redirecting physical energy from ego-desire to the satisfaction of cultural aims.

The relation between the two meanings of the word could be - for example – the fact that both are complex processes by which a state of being (solid; ego-desiring) takes a very different state on (gas; cultural satisfaction).

Anyway, it was just a word that came to mind today as I was hanging clothes in a pretty cold terrace and wrongly thinking that, because it was cold, they would not dry.

The phase diagram for CO2. At about 1 atmosphere (the pressure at sea level on Earth) and at room temperature, CO2 will turn directly from a solid into a gas, bypassing the liquid state. Illustration courtesy of Swinburn

Dostoevsky wrote it before you thought it

“The horror of it is that beauty is not only a terrifying thing – but it is also a mysterious one. In it the Devil struggles with God, and the field of battle is the hearts of men. And as a matter of fact, it’s natural that those who are in pain should talk about it. Now listen, for I want to come to the matter in hand”.

Dimitri Fyodorovich Karamazov to his brother Alyosha
The Brothers Karamazov, Fyodor Dostoevsky

Segundamano closes all print business in Spain

I recently read in the blog of the ex-IT Manager of Anuntis Segundamano (the Spanish operation of Schibsted Classified Media) that – as of November 2008 – all print publications of the company in Spain are closing.

They are leaders in the Spanish online market in Jobs (Infojobs and Laboris), General Merchandise (Segundamano), Real Estate (Fotocasa) and Automotive (Coches.net). Segundamano newspaper in Spain has been for 30 years a kind of transactional ‘institution’ for used goods. I think in Madrid almost 100% of the population over 30 knows it as the ‘free ads paper’ and has used it at some point or another to sell a house, get a job or find a car.

By now print was an irrelevant part of the company’s profit (they were issuing only 14 print titles now, versus +160 in summer of 2004). However, they had managed to keep the overall growth by aggressive online positions and pricing and closures of loss-making and non-strategic print titles. According to Juan Carlos’s blog, the flagship title “was not loss making at this time”, but the strategic decision was to close and re-structure accordingly.

Schibsted revealed in it’s interim report of Q3 2008 that Schibsted Classified Media had Q3 operating revenues of EUR 38,4M – 19% less than in Q3 2007. According to the report, “the decline is primarily due to the negative trend of the print publications in Spain”. Operating revenues from online grew 13% to EUR 27,5M in the same period. Online contributed 72% of operating revenues vs 52% in the previous period. Internet made an operating profit of EUR 8,4M vs an operating loss of EUR 1,2M for print.

Classifieds in print are, indeed, on a sliding scale. The general trend in media, according to enduragement’s interesting post, is another relevant signal.

The Russian Hour

A Russian internet professional was telling the other day some facts about the runet which are quite interesting.

The runet has a 29% yearly audience growth; 70% of users are on broadband; there’s an 80% penetration rate in ages 12-24; 48% of households have computers; 39% of Russians conform the runet’s monthly audience; 500M$ was the ad spend of 2007; 800M$ is the 2008 forecast (maybe less now after the crisis); the e-commerce turnover was supposed to be 2B$ in 2007 and is forecasted at 3,4B$ in 2008. About 150M$ were spent in Russia in web production last year (programming, design, webmastering…)

15B queries were made on search engines in the Russian language in 2007 (that’s 40% more than in 2006); there were 90M mailboxes with 9,5M daily users; in 2007 there were 50M user profiles in social networks in Russia. Number of profiles grew 15x in 2007.

The Bible Seller of the Digital Age

Other day I listened to some interesting comments in a panel in the Internet CEE conference in Warsaw, where the general manager of Google Polska (Artur Waliszewski), the product marketing director of Yandex (Andrey Sebrant) and the sales director of Seznam (Tomas Buril) debated.

When asked about the search eco-system, all three coincided on one mission and some key assets…

All 3 agreed that R&D focus pursues their main search mission: to anticipate and answer in the most relevant manner the questions posed by the people using their engines. In this respect, all efforts on the technology move for relevancy. Up to here, all clear. But then, when establishing the key assets of turning this into revenues, they said something to this effect:

Sebrant, Yandex: direct selling builds trust and is key to the revenue model. In this respect we focus fully in training and certification of our (sales) staff and understand that the only way to build trust is by facing our customers with people, generating trust by having “someone look you in the eye”

Waliszewski, Google: certification and training are keys in the Ad Words ecosystem; without those people to educate the clients, there is no success, however much we optimize and improve our algorithms to achieve search advertising relevancy

Buril, Seznam: we employ 250 in direct sales to get our products to the clients, this is the equivalent of the Google and Yandex effort to educate staff and certify them in order to get to the final customer and show them how to use search advertising

In my understanding what they’re saying here is: our products could be extremely complex on the technical side, but making them come across to the final customers and making money from them is, still and by and large, a direct selling and educational effort.

Could this be true? How do you feel about the issue?