by Adam Hartung | Aug 2, 2010 | Current Affairs, In the Swamp, Innovation, Leadership, Web/Tech, Weblogs
Things are tough for the printed word these days. Not for writing, or demand for information. That is doing great – with more volume than ever! But the issue is “printed” material. Clearly, the format is changing. But are business leaders changing with it?
The Los Angeles Times reported “Amazon.com Says It’s Selling 80% More Downloaded Books Than Hardcovers.” This is a big switch. Clearly Kindles are making a big difference as people are buying a lot less paper, and reading a lot more bits. Do you remember when your colleagues all said “I want a book, I don’t want to read looking at a screen?” Do you remember when businesspeople actually printed their emails? Clearly a sentiment gone by the wayside.
Accuracy in Media reported “U.S. Newspaper Circulation Dropped 30% Since ’07.” And it’s a global phenomenon, with the U.K. down 25%, Greece 20%, Italy 18% and Canada 17%. Fully 2/3 of major countries are seeing newspaper demand decline. No wonder Tribune Corporation, publisher of The Chicago Tribune, Los Angeles Times and Baltimore Sun, as well as others, is having such a hard time emerging from bankruptcy. Every month this looks more like the buggy whip business. Can you really expect the company to survive?
Amidst this backdrop, magazines have a dire future. I can remember when browsing magazines was the norm, and trade magazines arrived in my inbox daily. Often 60 or 100 page affairs. No longer. Magazines have disappeared like rain in the Sahara. Their savior is supposedly to go digital, but according to TwistedImage.com magazine leaders are at a loss how to proceed. In “The Media Disruption Within” Mitch Joel describes how a panel of magazine publishers are approaching the industry change mostly with despair that the internet is here – and no concerted effort to define a new model. Lock-in was prevalent as they kept hoping for a return to the good old days for print publishers, which we know is never going to happen.
So today the New York Post reported “Mag Publishers, Apple in Subscription App Scrap.” Most of us can acquire newspapers for an iPad issue by issue – but subscriptions aren’t possible. The magazine fears it will be the big loser – and rightfully so. If Apple controls the subscription and delivery, why couldn’t it repackage? Where would Apple stop, and what value would the magazine actually deliver? Since iTunes changed music buying, how many people buy albums? It would require the editors and publishers be really sharp to know their market – something most gave up a long time ago when they turned to focusing on narrow content for their “core product” and trying to maintain their “core competency.” Neither of which are very “core” any more.
We all want news that’s exactly what we want, and we’ll simply go to Google to get it. Who published it isn’t nearly as important to readers any more. Nor is the packaging. Pretty soon Amazon via Kindle, Apple via iPad, and we can expect a Google tablet to do the same, can start packaging up the chapters of various books for readers giving them just what they want. And with that they can link off to source articles from newspapers and magazine archives – or to current events. The role of publisher will get a lot less clear, as writers and editors can go directly to the electronic distributor with content.
Into this fray is an interesting new approach reported by CNBC.com, “Rupert Murdoch’s New Digital Game Changer?” The claim is that News Corp. is preparing an all-new interactive product designed just for on-line and mobile users. It wouldn’t be a re-treaded newspaper. Text, photo and video designed just for the medium. Now that would be the right way to go about preparing for 2020. Unfortunately, the way News Corp. handled MySpace.com doesn’t give us a lot of comfort this will be a truly White Space project. But if it is, it might just be the start of toward the product which will be journalism in 2020.
If you’re in publishing you have no choice but to get White Space going. The intermediaries – from the tech companies to new-age publishers like HuffingtonPost.com – are moving forward. The business as it used to be is gone. But the demand for news – for content – is bigger than ever. It will require a new business model. A new Success Formula. And this is clearly a case of change or die. The world will never again be as it previously was.
Even if you don’t think of yourself as a publisher – you probably are. Do you put out customer literature – like user or repair manuals? Do you put out sales literature? Do you communicate with investors or industry analysts? If so, how do you “publish” your material? Paper? Packaged pdf? In today’s world, an advantage can be created by moving quickly to what’s new.
Today there are a plethora of luxury automobiles on the market. These beautifully high tech luxury machines have manuals that can run 500+ pages! It is impossible to figure out how anything works by trying the manual! Why don’t manufacturers of $60,000+ cars have a Kindle (or iPad) built into the console? Those cost less than a set of brake pads today, they can be updated automatically, and are interactive.
Are you thinking about how you could use a $100 device to make life easier for your customers and supply chain partners? Or are you printing? If you’re printing, what’s your budget? How much would you save if your salespeople, customers, etc. were given a Kindle? Or iPad? Can you afford not to be thinking differently about your future?
by Adam Hartung | Jul 31, 2010 | In the Rapids, Innovation, Leadership, Openness
I’m pleased today to post another guest blog – written by Charles Searight of Vector Growth Partners. Charles offers a great viewpoint on a common issue – how to balance the needs of running a good business with implementing innovation. I hope you enjoy his point of view as much as I do:
Efficiency is a good thing, taken in moderation. The same with focus. It is good management hygiene to pay
attention to what you’re doing and try to do it efficiently. This helps build a competitive cost
structure and a results-based culture. From an operations standpoint that means that the use
of an occasional stopwatch or its modern day equivalents in order to eliminate
wasted effort and speed workflows makes perfect sense. Frederick Taylor made the great
contribution in 1911 of helping companies recognize that labor is a
controllable cost that can be managed, but he taught that a narrow focus on the
optimization of each operation and repetition of the “best practice” was the
key to success. He missed the
point (among others) that it is really the improvement of the process as a
whole that changes the game. It took Toyota and Yamaha and other
Japanese companies to teach the world that lesson 70 years later – leading to
today’s six sigma, lean, and time compression concepts.
We find the same phenomenon happening with most companies today
– they are so focused on optimizing their operations and replicating “best
practices” that they have totally lost sight of the process as a whole. The pursuit (often obsession) of
operational excellence becomes an end unto itself and gets disconnected from
the mission of generating growth and creating value. The end game is not to get lean and agile, but rather to get
lean and agile so that you can compete more effectively – leveraging these
capabilities to go to market in innovative new ways, to compete in new markets,
and ultimately to create new markets.
Companies that stay locked-in to being the most efficient
company at making widgets quickly find that low cost widgets have become a
commodity and wonder how they suddenly got into trouble. Being an efficient widget maker gets them
into the game, but not for long. In
order to survive and thrive they must immediately begin planning new markets
for widgets, innovations that will replace widgets, parallel markets targeted
at widget users, new markets for widget-user data, markets unrelated to widgets
that have been identified in conversations with customers, and so on, because
there is always a competitor that will figure out how to make widgets just as
efficiently as they can and undercut their price.
The companies that generate the most value, like Apple in
recent years, are the ones who focus on trends and where the market will be,
not where it has been. They use their
operational excellence as a competitive weapon not as a marketing message or
something to put in the trophy case.
Instead of bragging about how agile they are, they just beat the
daylights out of would-be competitors by launching new products and creating
new businesses at a pace that leaves others in the dust. They do this by planning from the
future and focusing on new ways to leverage their capabilities (or build new
ones) to satisfy tomorrow’s unmet market needs – not by focusing on optimizing the
core competencies of yesterday and today.
They combine the yin of operational excellence with the yang of market
innovation.
Charles Searight is the Managing Partner of Vector Growth Partners headquartered in McClean, VA. His firm helps companies of all sizes and industries, public or privately held, and many with external funding from private equity pools, develop and implement growth strategies. Feel free to comment on Charles input right here, or contact him directly. If you could use help developing a growth plan you can contact Charles at CSearight@VectorGrowth.com. Website www.VectorGrowth.com
If you enjoy ThePhoenixPrinciple.com and would like to submit a guest blog please contact me. I am very pleased to offer up the input of others who have insight or case studies you’d like share about innovation, strategy, growth, lock-in, defend & extend management, scenario planning, competitor analysis/insight, disruptions or white space!
by Adam Hartung | Jul 23, 2010 | Current Affairs, Innovation, Leadership, Lock-in, Web/Tech
Are you prepared to implement tablets in your business? More specifically, how have you adjusted your hardware spending plans, your software purchase plans, your IT development plans, your field technology deployment plans and your staffing plans to spend less on servers and PCs while spending more on tablets? Unfortunately, far too many companies are stuck in their Microsoft/PC relationship – effectively waiting on their vendor to bring them a solution – something specifically CIO Magazine warns against in “You are Not Your Vendor.”
We’ve watched the unprecedented explosion in iPad adoption. in just a few months iPad sales have become as large as iPod – the product that turned around Apple’s fortunes.
Source: Silicon Alley Insider
Cisco has launched a tablet according to Channel Insider “Cisco Cius: The iPad Killer.” Hewlett Packard (HP) is launching a tablet using the WebOS operating system from its new acquisition Palm according to Channel Insider in “Microsoft – HP Tablet War.” As new tablets are launched without using Microsoft products the software giant increasingly looks like it’s missed the boat – even as Channel Insider offers up 10 ideas for how Microsoft could try to get in the game in “Windows 7 vs. Cisco Cius.”
So, have you started developing future scenarios – both business and technical – that incorporate using tablets? CIO Magazine recommends “Use Scenario Planning to Get Beyond Legacy Systems.” Have you started testing different tablets to learn how they can improve your business – and what the differences are between vendors? If you aren’t, then your legacy investment (and your legacy vendor) will keep you using old technology. If you’re stuck with PCs while others adopt the next wave you will find yourself wandering around in the Microsoft Lock-in – while the market moves rapidly in a different direction! While this may seem fine today, and cheaper than changing, what you risk is losing business to competitors who move quicker, adopting tablets and their applications to improve performance and lower cost.
by Adam Hartung | Jul 21, 2010 | Current Affairs, Food and Drink, In the Rapids, Innovation, Leadership
“I Failed Fast and Completely Re-invented My Company” is the BNET.com article title. Pixability.com of Cambridge, Mass. started out as a video conversion and editing business for families. Unfortunately, it cost more than most families could afford. Lacking revenue, the entrepreneurs thought up making highlight reals for youth athletes competing for college scholarships. Neat idea, but only 3 sales in 3 months was less than covering costs. Despite the original plan, and a desire to raise more money, it hit the founders that if they “stuck to their core” business plan they weren’t going to survive. More money or not. That’s when they realized that turning down corporate work might not be such a great idea – even though such work wasn’t in the plan. Turning to what the market wanted, editing corporate videos, the company is now growing fast and making a profit.
Same song, different verse, for Blue Buddha Boutiques of Chicago as reported in “Small Businesses Have Flexibility to Make Big Changes” at The Chicago Tribune. The company started out making chain mail jewelry sold on the internet. Not much sales. But when the entrepreneur listened to customers she heard there was more demand for jewelry supplies – so customers could make their own jewelry – than for the finished product. A quick shift in the business, aligning it to market needs, and the company shot up to a half million dollars revenue.
Far too often entrepreneurs hear “find your passion, and go with it.” “Write a business plan, stick with it, persevere, fight for success.” “Do what you’re good at.” Of course, most entrepreneurs fail. Why, because this is such lousy advice. Nobody cares about your passion, nor your plan, or your ability to persevere. Customers care about you selling them what they want. If your products or services don’t align with market needs, all the passion, business planning, fighting and perseverance isn’t worth spit.
Of course, this flies in the face of “Built to Last” author Jim Collins. To him, all winners are those who persevere. Looking backward, he can say entrepreneurs he studied were passionate and hard working. Maybe they wore white shirts, and enjoyed Juicy Fruit gum as well. The point is, that isn’t what made them successful – even if their personality traits were as he described. What’s important is that you find a market with growth, and more customers than suppliers, so you can readily sell something at a profit. Adaptability is the hallmark of great entrepreneurs. They have no product or service religion – no commitment to “excellence” – no predefined notions of how to succeed in business. Rather, they have a keen ear for the marketplace and the mental flexibility to rapidly shift into what customers want!
I beg you to be careful about listening to gurus – and especially Jim Collins. I was appalled by his column “Tuned in to four New Realities” published on Leadership Academy. Still unable to explain why companies he glorified in “Good to Great” such as Circuit City, Freddie Mac and Fannie Mae were such horrible failures – he tenaciously sticks to his guns. To him, all leaders must persevere. His new realities:
- “Define your business according to core values”. Values are great, but if they aren’t somehow intricately linked to delivering a product or service the market wants, and wants in enough demand to produce a profit, it doesn’t matter. Simple. I don’t say give up your soul. But values are not where you start. You must be flexible to align with the market. If your values won’t let you do that you need to do something else.
- “Organize by freedom of choice.” Honestly, how you organize should relate to meeting the market requirements. Whether its hierarchical or matrix or some other form – it must meet the critical market needs. Freedom is great – as long as it supports meeting the market need. You are free in America to do whatever you want, but if you don’t sell enough stuff at a high enough price you don’t eat. And for all its benefits, “freedom of choice” in the workplace is less important than positive cash flow.
- “Lead without using power.” Whether you use carrot or stick, people have to deliver what markets want. And companies have to adapt quickly to shifting wants. Sometimes it happens naturally, and leaders can just guide the process. Sometimes Lock-in to old assumptions get in the way, and then leaders have to get out a 2×4 and redirect attention to where the market wants it. It’s good to be kind and a servant-leader, but employees appreciate a good paying job with some clear guidance (at times dictatorial) to unemployment from “such a nice guy.”
- “Walls are dissolving.” I haven’t even figured out what this one means. But it’s clear that any walls which keep you from seeing the real market need is a bad thing. After that, aligning to market needs is “job #1” as Ford ads once touted quality.
Are you flexible to go where the market leads you? Or are you adamant about doing what you want to do? Are values something you use to help align to market needs, or a crutch you use to defend doing what you’ve always done? Are you able to change your management style, and organizational design, to meet market needs – or do you prefer to remain Locked-in to old management ideas and business models? Whether your company is big or small, old or young, does not matter. Lock-in will kill you when markets shift. Whether it’s structural Lock-in to an existing business, or mental Lock-in to a business plan. Adaptability to meet shifting market needs separates the winners – like Apple, Google, Facebook and Twitter – from the market losers – like Microsoft and Dell.
If you have any doubt, just ask the folks at Tasty Catering in Chicago. While others are still complaining about he recession, crying about lower sales, and food service businesses (including restaurants) are half full or closing shop — the folks at Tasty Catering are challenging the monthly revenues they set in peak years of 2007 and 2008. Instead of doing what they always did, the leaders – from the CEO to the 20-something managers talking to customers – are listening to the market and opening new businesses that meet market needs. While most employers are cutting staff, employees at Tasty Catering are working overtime – and in some businesses second shifts are being added. What was once a hot dog stand has been turned by the leaders into the winner of Best Caterer in the USA more than once – and a business that is thriving even in this “Great Recession.” Because they know how to adapt.
PS – Tasty Catering is one of the most value-responsible companies in America. Filled with employees that listen and care, and managers that want their employees to succeed. That’s because the leaders don’t see a trade-off between values and giving the market what it wants. If they keep the business moving forward, through keen connection to the marketplace, everyone wins – and values are not an issue. By being market-savvy, and flexible, Tasty Catering is considered one of the Top 10 employers in Chicago, and in its industry. And if you cater from anybody else in Chicago, or buy your delivered baskets or trays of cookies and muffins from anyone else, you simply don’t know what you’re missing!
by Adam Hartung | Jul 14, 2010 | Current Affairs, Defend & Extend, In the Rapids, Innovation, Leadership, Lock-in, Web/Tech
For good reason, a lot of controversy is swirling around Apple’s iPhone 4 problems. With Consumer Reports saying the product’s antenna is defective, and the company admitting there’s a software glitch regarding signal strength reporting, Apple’s newest smartphone release is looking not so smart. Even CNN television was running reports about Apple’s “debacle” and what the company should do this morning – including product recalls, software upgrades, issuing new cases, etc. Recommendations that could cost billions of dollars!
Beyond the cost to fix outstanding customer problems, shareholders and employees have good reason to be concerned. According to MediaPost.com “Quantcast: Android Keeps Gaining Steam.” For the most recent quarter Google is now #2 in phone shipments, exceeding Apple and trailing only RIM. Google has gained 14 share points this year, while Apple has lost 7.7 share points and RIM 5.7 points. There are now 60 Android models on the market.
And Google’s open development platform seems to be picking up steam compared to the more closed/controlled Apple platform. Share of handhelds is less critical than number, and share, of downloadable (and downloaded) apps. That Google’s app base is growing quickly, as is Apple’s, is really the story to watch. But with the iPhone 4 issues, will app developers look closer at Android?
This story is a microcosm of Lock-in and Defend & Extend management. Apple was the big pioneer in pushing smartphone apps, and with only 3.5% of the phone market garnered huge PR, unit sales and profits with its early generation. It’s closed environment, along with sleek style and commitment to AT&T network, were all part of the Success Formula. Apple Locked-in on that, and through 3 generations kept growing. But now we see the kind of thing that happens when a business unit Locks-in. In an effort to make rev 4 the team starts pushing for more, better, faster, cheaper – optimizing what’s been working – and suddenly a mistake happens. A parallel to BP – only happening in “warp speed.” The team is trying to push hard to maintain, even grow, handset and app share – and using D&E management to do so. The risk, as we see, is that optimization can lead to cutting costs (antenna design and implementation), and then getting defensive when you’re caught making a mistake!
Google is still pushing forward in smartphones with largely a White Space team approach. Not yet Locked-in, it is still experimenting with new solutions. New vendors and markets. It is learning how to attack the Lock-ins at both RIM (the enterprise market) as well as Apple. And as a result, it’s share is gaining. This is good for Google – and definitely not good for Apple.
The biggest screaming is for Steve Jobs to quit being defensive and become apologetic, as BusinessInsider.com recommends in “Here’s How Apple Can Recover from the Snowballing iPhone 4 Disaster.” The claim is that Mr. Jobs is so personally magnetic that his mere verbal apologies will keep customers and developers loyal – and keep Apple in the lead.
Not so fast. Mr. Jobs is a good CEO, but if your phone doesn’t work…..
Apple needs to get the iPhone team back into White Space work. Today the iPad is the big White Space project at Apple. The Mac, iPod, iTunes and iPhone have started to lose their edge. As Apple has brought forward new products, in new markets, it has pulled off the big goal of “jumping the curve” – by going from one growth market to the next. It has been able to keep up high growth through new market entries. The iPad is the latest in this series, as it is developing the emerging – and rapidly growing – tablet marketplace.
But as we can see, the risk is that D&E behavior creeping into the other markets becomes risky. Luckily competitors for iPod, iTunes and iTouch have been rather feckless. So locked-in to their old, outdated Success Formulas they have done little to effectively attack Apple. Apple has maintained share rather easily.
But this is not the case with iPhone. Another new entrant, Google, is using new scenarios about the future, a deep understanding of competitors and a willingness to Disrupt itself and the marketplace. In a characteristically Phoenix Principle way, Google is attacking the iPhone by taking advantage of the Lock-in Apple has to its initial Success Formula. If Apple doesn’t change, not only will it continue to make unwise decision errors – such as the antenna problem and the horribly defensive PR reaction to its discovery – but it will rapidly lose its advantage. Apple’s advantage came from understanding the market – not optimizing iPhone capability. And Google looks to be gaining the marketplace understanding advantage now.
Apple has to redesign the iPhone management. The team must push itself back into White Space. Be driven not by its internal goals for iPhone, iPhone apps and capabilities – but driven by future scenarios. The team has to get a LOT, LOT savvier about competitors. RIM and Palm are non-competitors now. It’s about understanding Google and its partners – including Facebook. Apple has to rethink its future scenarios and how competitors will try to do things differently. And Apple has to Disrupt its Lock-in to the original Success Formula in order to develop new innovations that can allow it to not only grow (in a very high growth market) but maintain share!
The iPhone 4 problems should be a wake-up call to Apple. Falling into D&E management thinking is easy. Anybody can become inwardly focused on optimizing historical strengths and capabilities. It’s remarkable how you can lose sight of emerging competitors, hoping your Success Formula will win if you just work at it harder. Apple needs to keep winning with the iPad, as that’s a tremendous opportunity. But it also needs to get the iPhone team back into using White Space to behave like a Phoenix Principle organization for the smartphone business.
by Adam Hartung | Jul 9, 2010 | Current Affairs, In the Rapids, Innovation, Leadership, Lock-in, Openness, Web/Tech
“To Boost Innovation Just Keep the Boss Away” titles the BQF Innovation website. Citing data from The Nielsen Company’s study of 30 large consumer products companies showed that companies with White Space Teams (what they call Blue Sky) teams are far more successful at creating revenue generating innovation than companies trying to innovate through the traditional organization structure. And, as recommended in this blog, these teams are more than twice as effective when they are dedicated off-site teams! And, organizations with minimal senior executive involvement generate 80% more product revenue than those with heavy senior level participation.
Hierarchy is an innovation killer. The higher a manager goes, the more he feels compelled to “weed out” options. Unfortunately, most of this weeding is based upon Defending & Extending the existing Success Formula. Doing more of the same better, faster and cheaper dominates innovation thinking the higher the manager is placed! Rather than championing new innovations that could take the business into new markets with new products, senior people will apply the 20 Innovation Killers from my last blog posting! They will say the idea doesn’t fit, for a variety of reasons, and feel justified they’ve added their managerial “value.”
The Heart of Innovation column from IdeaChampions.com amplifies this in “Breakthrough as an Accident Waiting to Happen.” The author describes how many innovations are the result of ongoing experimentation. Trying new combinations. Learning, and trying again. Managers too often want the innovation to be fully developed “in the lab.” They are unwilling to set up teams that are given the permission, and resources, to try, get market feedback, and keep trying. To learn how to compete in order to eventually win!
All companies want to grow. All claim to want innovation. But too often, the senior people just want small improvements that don’t affect any Lock-ins. They hope for spectacular results from minimal input. Contrarily, the organization itself frequently contains a large number of people who have great insights for things that could work – if given the opportunity to be applied, tested, reworked and made to fit emerging needs. We need are more managers willing to set up White Space teams and let them do their job – while holding the teams accountable for results! Like the leadership at Apple and Google, let people work and learn, and evaluate them on the outcomes – rather than trying to tell them what they need to do, how they need to do it, and setting up boundaries to keep innovation within the Locked-in Succeess Formula!
by Adam Hartung | Jul 6, 2010 | Defend & Extend, In the Swamp, Innovation, Leadership, Lock-in
All organizations must move into new markets with new customers buying new solutions. It’s inevitable. Over time, all product markets shift to new solutions. Given this inevitability, isn’t it amazing how few make the shift?
BloggingInnovation.com published a GREAT article “20 Phrases That Kill Ideas and Innovation.” What I like is that we’ve all heard these 20!!!! Here we go with “That’s a good idea, but…”
- It’s against company policy
- It’s not practical
- It’s not necessary
- We don’t have the resources
- It will cost too much
- We’ve never done it that way
- Our customers (or vendors) won’t like it
- It needs more study
- It’s not part of your job
- Let’s make a survey first
- Let’s sit on it for a while
- That’s not our problem
- The boss won’t go for it
- The old timers won’t use it
- It’s too hard to administer
- Why hasn’t someone else suggested it before?
- Let’s form a committee
- We should wait until the economy improves
- Who else has tried it?
- Is it best practice?
Really! I bet you’ve heard all of these. Defend & Extend Management becomes so embedded in the culture managers don’t even realize they’ve turned off to new markets and fallen into focusing solely on trying to protect the old. And as markets shift these phrases never go away – they just maintain Lock-in!
The next time somebody brings you an idea – an innovation – I want you to gauge your reaction. Before you speak, see if your mind brings you one of these 20. If so, you’re more dedicated to Lock-in than growth. You’re stuck in D&E Management. And that means you need a healthy dose of The Phoenix Principle. Time to do some scenario planning, dig deeply into competitors, Disrupt those Lock-ins and set up a White Space team to explore new opportunities! Overcome these objections before they stop you – cold!
by Adam Hartung | Jul 2, 2010 | Current Affairs, Defend & Extend, In the Swamp, Innovation, Leadership, Web/Tech
(Note: See more about my globally syndicated radio X Zone Radio interview with Rod McConnell in postscript below)
Today the Harvard Business Review blog got to the topic of my early May Forbes article (Microsoft's Dismal Future) with "Microsoft and the Innovator's Paradox." Unfortunately, painting Microsoft as facing a difficult paradox gives Ballmer and the management team too much credit. It implies that Defend & Extend behavior is a good tradeoff compared to investing in growth markets. This isn't really a trade-off because good companies pursue both courses, growing the existing business as long as possible AND investing in new growth markets simultaneously. Like Google investing in search and ad placement while investing in Android. Positioning Microsoft as facing a dilemma may sound politically attractive, but is inaccurate. Microsoft simply needed to do more in growth markets – a problem shared by too many companies. Instead it spent way too much in sustaining developments – and now is in big trouble.
HBR did not offer much of a solution for Microsoft. Instead, leaving the impression that it's reasonable to expect "mature" organizations to do more sustaining innovation. The truncated S curve displayed HBR article ignores the reality that "mature" companies don't extend forever – but rather simply fall into the Swamp of poor returns and eventually disappear into the Whirlpool as growth slows. And further ignores the horrific cost of sustaining innovation, as we detailed in Microsoft's exorbitant 2009 R&D spending as the company kept pushing Windows 7 and Office 2010 development. Microsoft really hasn't faced a "paradox" for investing for many years – leadership made a bad decision to keep investing in old markets rather than pursue new ones.
Contrarily, Mediapost.com's Marketing Health column ran a description of how pharmaceutical companies could use iPads to improve the performance of their physician customers and simultaneously market their own products in "Tap Into iPad's Marketing Power." Using these low cost devices (including Kindle and Cisco's new Cius [Cnet.com "Cisco Introduces New Cius Android Tablet PC"]) is not a "paradox" in investing for growth. It's additive. As readers of this blog know, for over a year I've promoted marketers and designers become more proactive in using these new mobile devices. Only by viewing the new development as a trade-off from doing more of the old marketing does it slow investment in a high growth opportunity. By looking at the new opportunity as something that takes away from doing more of the old creates an artificial paradox – not a real one. Companies simply aren't doing enough of what will help them grow – too often choosing the low-return route of doing more of what they know in old markets simply because they understand it better.
PS – Check out my radio interview with Rod McConnel of X Zone Radio about BPs management crisis, and how it
applies to all businesses. Recorded by X-Zone in Canada the show is being syndicated
this weekend across the world to various radio stations. You can find the timing of play, or the podcast version, at the
X-Zone web site. Download On Apple iTunes here. Download as Podcast here. Or listen on X Zone jukebox here.
PPS – Thanks to Gary Woodill at Brandon-Hall.com for picking up my comments on his Workplace Learning page – "It's the One You Don't See That'll Kill You." He trumpets replacing traditional strategic planning with more scenario planning to better prepare companies for success. Great article!
To Everyone in America – Happy Independence Day!
by Adam Hartung | Jun 20, 2010 | Current Affairs, In the Rapids, Innovation, Web/Tech, Weblogs
Will YouTube be the USAToday or Wall Street Journal or New York Times of 2015 or 2020? According to Mediapost.com "YouTubes Secret Citizen Journalism Plot Exposed." Referring to a SFWeekly article by Eve Batey "YouTube Explains Top Secret 'News Experiment' to Local Media, But Doesn't Really" the reporting is that YouTube plans to hire groups of citizens in major cities, starting in San Francisco, to report news events via YouTube. Could this replace the local newspaper? Or maybe even the local evening news?
Americans are so used to freedom of speech that it's easy to forget what the concept launched in the USA. 200 years ago anybody who could access a printing press, of any size, could produce a newspaper. That as revolutionary. "Citizen journalism" was the norm, and there were literally thousands of newspapers. That situation remained very true well into the 1900s. Eventually acquisitions led to consolidation and a dramatic reduction in the number of newspapers.
The decline in the number of newspapers was aided by consumer journalism preferences shifting, in part, to radio and television. As radio and television journalism was born the limitation was "bandwidth" and therefore access. Thus, from the beginning there was government control over the number of stations. That scenario very different from the founding of newspapers, as there were limited channels from the beginning. But that didn't mean that the desire for video journalism was lower.
What will journalism be in 2020? We know that most major city newspapers are on the brink of failure, with bankruptcies (such as Tribune Corporation, owner of The Chicago Tribune and The Los Angeles Tkimes as well as others) not uncommon. As newspaper pages have shrunk, the internet has allowed the return of "citizen journalism" as bloggers and reporters have emerged able to tell a story, and with very low cost access to potential readers. Having internet access is possibly cheaper, and certainly easier, than operating a printing press in the era of Benjamin Franklin, or even a local newspaper of 1900. By numbers there is no doubt many more "citizen journalists" than "professional journalists" working at American newspapers today.
So why couldn't YouTube take advantage of a preference for video, and link together the armies of independent "journalists?"
I can't help but recall the television program Max Headroom from 20 years ago – where it was perceived that real-time information on practically all topics would be reported on millions of televisions everywhere – televisions which could not be turned off by law. Wasn't Max simply an avatar, running around what we could now consider the web, popping up on computer – rather than television – screens? Today I can create my own Max Headroom avatar to search the web for real-time content – mostly text. Why couldn't YouTube give me a tool to do the same thing with video?
Many people are bemoaning the decline of traditional journalism. But is this a bad thing? Given all the screaming about today's "media bias" it would seem that citizen journalism could become a great equalizer. If YouTube and Google can help give me the tools to search for what's interesting to me that would seem to be a very good thing. And if in the process they sell some ads so that the content can grow, that doesn't seem like a bad thing either.
In the movie Network, made some 30 years ago, the thesis was put forward that news would become entertainment – and less "news". With the growth of Fox News, MSNBC News and the number of broadcast minutes given to television news magazines like Nightline, one could reasonably claim that the movie was surprisingly foretelling. Today, getting up to the minute news is even hard on a channel like CNN. It's not at all unclear that providing a platform for citizen journalists, via YouTube and Google searches of the web, is a bad thing at all.
Are you prepared? Are you learning how to use these new tools? Are you prepared to change your learning behavior? Your advertising programs? Could you be a citizen journalist? It certainly looks clearer every year that journalism in 2020 will look substantially different than it does in 2010.
by Adam Hartung | Jun 9, 2010 | Current Affairs, Defend & Extend, In the Swamp, Innovation, Leadership, Lock-in, Web/Tech
I so enjoyed the feedback from my article on Chicago and Illinois politicians I decided to take on another sacred cow – so let's talk about education.
According to Inside Higher Education's article "In Search of Innovators" there is a distinct lack of innovation in higher education. They cite a number of studies that show colleges are much better at enrolling students than graduating them. Especially private schools and junior colleges. And, imagine this, professors and administrators are more interested in continuing their positions and jobs than what students learn ("learning outcomes" in the industry vernacular.) Seems that keeping things from changing is the highest interest for educators, rather than actually teaching anything students need to learn to compete today.
But, we all know this. We've all seen colleges that have courses taught by only one or two professors, who only teach at odd hours, only allow a few students, refuse to keep office hours, or refuse to post previous exams. We're all familiar with schools that limit the hours administration offices are open, and are intractable about the requirements for graduation – even if they were set 20 years ago.
Quite simply, Lock-in drives most schools. Programs like tenure which make it impossible to fire anyone help maintain Lock-in. And professors would rather argue about what they don't want to do than try anything new and different. For all of us who went to college, and especially for those of us with students in college, it's clear that students are a route to their money (or their parent's money) – sort of little money pumps – intended to allow the college to not change. Many colleges even brag about how little they've changed over the last 20, 50 or even 100 years! In a world where change is every present, and dealing with change is now one of the most important skills a young person needs!
According to The Chronicle of Higher Education "For Innovation to Occur, Colleges Need a Big Push, Scholars Say." This journal cites program after program where a college tried to start up something new, only to have the program fail. But of course, because there is no White Space in colleges. White Space is where you give Permission to break all Lock-ins and do whatever it takes to be successful – and then provide the resources for success to occur. This does NOT exist in a college, where none of the Lock-ins can be violated. A professor can't even decide to change from teaching in class to using video instruction or on-line training because it's not allowed. So how can something new really be tried?
Where we have seen growth in higher education has been in for-profit schools like Devry and Phoenix that have rapidly challenged tradition and moved into new education models. Traditional schools decry these institutions, claiming the quality isn't acceptable. Of course, the "quality" argument is what printers used to claim Xerox machines would never succeed. It's what DEC said about AutoCad – before DEC went out of business. It's what Kodak executives said would make digital photography a tiny market compared to film. It's what executives at Sony said would keep music customers from buying MP3 devices/music before Apple launched the iPod. Quality is the #1 excuse used by Locked-in organizations to justify why they shouldn't change.
Forty years ago it was pretty clear that if you could afford college and grad school, it was worth it. But as costs/prices have skyrocketed, and the relevancy of education in many institutions has declined, that argument has lost a lot of credibility. Increasingly students are saying they want their education to be meaningful, practical and applicable. The market has shifted. They want to study on their schedules, without giving up their incomes or struggling with horrible commutes. And increasingly, these customers are moving to the suppliers that meet their needs – rather than trying to Defend & Extend old practices.
It's ironic that in the one place where we should most be open to new models we have almost no innovation. But it's impossible without a change in the structures and processes – and that requires a willingness to create a lot of White Space. For most colleges, I'm not optimistic.
