This week I’m in lovely Boston, where folks are trying to convince me it is unseasonably warm, and yet I’m freezing the thing I sit on off. EMC is a fascinating company because I think its market-leading innovation isn’t really in product — it is in organizational structure and strategy, which is vastly different from any other company. This is the first of two posts I’ll do on the event; in this one, I’ll make some near random observations about the firm and its efforts.
NPS to Great Place to Work
EMC lead the move to use Net Promoter Score (NPS) to measure executives based on customer advocacy. This is now a near-universal practice with the vendors at EMC’s scale. This year, it popped up a new metric that brought a smile to my face: Great Place to Work. Out of 2,800 companies measured, according to EMC, it ranks 18th.
It was ROLM’s Great Place to Work department that originally brought me into the technology market. IBM bought the company, decided that “Great Place to Work” was every manager’s job, and dropped our revenue by two-thirds, showcasing that when something is everyone’s job, unless there is someone holding feet to the fire, it is no one’s job.
EMC is apparently putting the same kind of focus on making EMC a great place to work that it did to push the firm up the rankings in customer loyalty.
Joe Tucci May Be Most Beloved CEO
As a community, we tend to have a love/hate relationship with most CEOs. I name a number as personal friends While Joe Tucci isn’t one of them, from the standpoint of the analyst community, he is likely the most well regarded. I think a lot of it has to do with the fact that he just doesn’t BS us. Let me give you an example. One of the analysts said he had spoken to a potential EMC customer who took exception to an EMC labor practice (it enforces non-competes), and that this customer wouldn’t do business with EMC unless it changed this practice. Tucci explained that only a minority of employees have non-competes and in exchange for signing them, these employees get additional financial incentives like stock options. This is a technology business and people leaving in critical positions do take knowledge with them that is considered proprietary to the employer. Tucci basically called the alleged customer’s position “idiotic” and shared that he was glad they didn’t want to do business with EMC.
Most CEOs would have thought what Tucci said and then tried some largely transparent mealy-mouthed response to the question that no one would have believed. Tucci was up-front and candid and that’s why we love him. Even though I’m not a fan of non-competes, I can see why they are necessary and think they do have a purpose for some positions. I think that EMC’s approach to provide extra compensation in exchange for signing one a reasonable balance, as for many others, it is simply a condition of employment and global — both of which I think are unfair.
The Power of Choice
EMC has a very unique federated company model, based on the belief that choice can be a winning strategy. Tucci said the company wanted to be the opposite of Oracle, which is most obviously employing a lock-in strategy. This is fascinating because, years ago, I wrote a post mortem paper while working at IBM on why IBM nearly failed. There were a number of causes but one of the most prominent was the implementation of a “lock-in” strategy, which gave the company the false belief that customers couldn’t move. That led to practices now mirrored in Oracle, which focuses efforts on finding new and creative ways to bill for things, rather than assuring products are competitive and customers are happy. Years after writing that IBM paper, I watched Microsoft as it was forced to shift from a strategy of locking together its products to one of interoperability, finding that not only were customers happier, they were actually far more successful. Assuring choice and interoperability focuses product groups on customer needs. The result is that customers become advocates and these advocates accelerate sales. Rather than feeling locked to the vendor, they can leave but don’t want to. Personally, I would much rather work with a company that wants to earn my loyalty than one that wants to force me to stay regardless of how much unnecessary pain it is causing me.
Expertise in Solutions
Typically, I hear “labs” and I think of technologies and products that look promising but rarely make it to market. What I don’t expect is a lab focused on getting stuff to work better together. EMC has federated labs that appear focused on making stuff work together better. I think this may be unique in the market; not working on interoperability, but having a formal research effort that is uniquely focused on taking the various products from each of the federated companies and turning them into unique cross-organization solutions. This is a bi-directional effort, which also aligns roadmaps and assures that future changes don’t break the solution.
Wrapping Up: EMC Is Like No Other
EMC is really like no other company I’ve ever covered. Its organizational structure is the most innovative, it focused early on leading in both customer loyalty and most recently in making the firm one of the best places to work, the CEO is one of the most beloved in the technology industry, and it is demonstrating that you can be incredibly successful not by locking in customers but by giving them choices and just assuring theirs is legitimately the best one.
I think several books could be written about this company and why it is successful. At the heart of all of them is the fact that it is doing what’s right for its employees and customers. It seems so simple that I continue to marvel at how many companies find it so hard.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+