by Adam Hartung | Nov 12, 2009 | Current Affairs, Defend & Extend, In the Rapids, In the Swamp, Innovation, Leadership, Openness, Television, Web/Tech
The Myth of Market Share by Richard Minitar is one of those little books, published in 2002 by Crown Business, that you probably never read – or even heard of (available on Amazon though). And that's too bad, because without spending too many words the author does a great job of describing the non-correlation between market share and returns. There are as many, or possibly more, companies with high profitability that don't lead in market share as ones that do. Even though the famous BCG Growth/Share matrix led many leaders to believe share was the key to business success. Another something that worked once (maybe) – but now doesn't.
"Moto Looks to Sell Set-Top Box Unit" is the Crain's Chicago Business headline. Motorola's television connection box business is #1 in market share. But even though Motorola paid $11B for it in 1999, they are hoping to get $4.5B today. That's a $6.5B loss (or 60%) in a decade. For a business that is the market share leader. Only, it's profitability + growth doesn't justify a higher price. Regardless of market share.
Kind of like Motorola's effort to be #1 in mobile handset market share by cutting RAZR prices. That didn't work out too well either. It almost bankrupted the company, and is causing Motorola to sell the set top box business to raise cash in its effort to spin out the unprofitable handset business.
On the other hand, there's Apple. Apple isn't #1 in PCs – by a long shot. It has about a 14% share I think. Nor is it #1 in mobile handhelds, where it has about a 2.5% market share. But Apple is more profitable than the market leaders in both markets. Today, Apple's value is almost as high as Microsoft – historically considered the undisputed king of technology companies.
Chart source Silicon Alley Insider 11/12/09
While Microsoft has been trying to Defend & Extend it's Windows franchise, its value has declined this decade. Quite the contrary for Apple.
Additionally, Apple has piled up a remarkable cash hoard with it's meager market shares in 2 of 3 businesses (Apple is #1 in digital music downloads – although not #1 in portable MP3 players).
Chart Source Silicon Alley Insider 11/11/09
"While Rivals Jockey for Market Share Apple Bathes in Profits" is the SeekingAlpha.com headline. Nokia has 35% share of the mobil handheld market. It earned $1.1B in the third quarter. With its 2.5% share Apple made $1.6B profit on the iPhone. While everyone in the PC business is busy cutting costs, Apple has innovated the Mac and its other products – proving that if you make products that customers want they will buy them and allow you to make money. While competitors behave like they can cost cut themselves to success, Apple proves the opposite is true. Innovation linked to meeting customer needs is worth a lot more money.
Bob Sutton, Stanford management professor, blogs on Work Matters "Leading Innovation: 21 Things that Great Bosses Say and Do." All are about looking to the future, listening to the market, using disruptions to keep your organization open, and giving people permission and resources to open and manage White Space projects.
If your solution to this recession is to cut costs and wait for the market to return – good luck. If you are trying to figure out how you can Defend & Extend your core – good luck. If you think size and/or market share is going to protect you – check out how well that worked for GM, Chrysler, Lehman Brothers and Circuit City. If you want to improve your business follow Apple's lead by developing thorough scenario plans you can use to understand competitors inside out, then Disrupt your old notions and use White Space to launch new products and services that meet emerging needs.
by Adam Hartung | Nov 9, 2009 | Current Affairs, Defend & Extend, General, In the Swamp, Innovation, Leadership, Lock-in
Leadership
Why The Pursuit Of Innovation Usually Fails
Adam Hartung,
11.09.09, 04:11 PM EST
It's not what we're trained for as leaders or how our businesses are set up to work.
Forbes published today "Why the Pursuit of Innovation Usually Fails." "Most companies everywhere are struggling to grow right now. With their
revenues flat to down, they're cutting costs to raise profits. But
cutting costs faster than revenues decline is no prescription for
long-term success….."
The article goes on to discuss how from Gary Hamel to Jim Collins to Michael Tracy and Fred Wiersema to Malcolm Gladwell to Tom Peters — managers have been taught to identify their "core" and "focus" upon it. Whatever that core may happen to be, the gurus have said that all you need to do is focus on it and practice and in the end – you'll win.
But unfortunately we all know a lot of very hard working business leaders that focused on their core, working the midnight hours, sacrificed pay and bonuses, and kept trying to make that core successful — only to end up with a smaller, less profitable, possibly acquired (at a low price) or failed business. While the best practices make sense when looking at past winners, reality is that they were followed by a lot of people that didn't succeed. Their best practices give no great insight to being successful. They are of no more value than saying "treat people well, be honest, don't lie to customers, don't break the law, don't get caught if you do, show up at work." Nice things to do, but they don't really tell you anything about how to succeed.
The mantra today is for innovation, but thirty years of these "best practices" now stand as a roadblocks to doing anything more than defend & extend the current business. Only by understanding the objective to defend & extend what already exists can you explain how can one of the world's largest consumer product companies can call Tide Basic an innovation.
Enjoy the read, and please comment!
by Adam Hartung | Nov 5, 2009 | Current Affairs, Disruptions, In the Rapids, Innovation, Leadership, Music, Web/Tech
$150billion. That's a lot of money. And that's how much shareholder value has increased at Apple since Steve Jobs returned as CEO. Can you think of any other CEO that has aided shareholder wealth so much? Do any of the cost cutting CEOs in manufacturing companies, financial services firms, or media companies see their share prices rising like Apple's?
Fortune has declared this "The Decade of Steve" in its latest publication at Money.CNN.com. Such over-the-top statements are by nature intended to sell magazines (or draw page hits). But the writer makes the valid point that very few leaders impact their industry like Apple has the computer industry, under Jobs leadership (but not under other leaders.) Yet, under his leadership Apple has also had a dramatic impact on the restructuring of two other industries – music and mobile phones/computing. And a company Mr. Jobs founded, Pixar, had a major impact on restructuring the movie business (Pixar was sold to Disney, and has played a significant role in the value increase of that company.) So with Mr. Jobs as leader, no less than 4 industries have been dramatically changed – and huge value created for shareholders.
No cost-cutting CEO, no "focus on the core" CEO, no "execution" CEO can claim to have made the kind of industry changes that have occurred through businesses led by Steve Jobs. And none of those CEO profiles can say they have created the shareholder value Mr. Jobs has created. Not even Bill Gates or Steve Ballmer can claim to have added any value this decade – as Microsoft's value is now less than it was when the millenia turned. Despite the relative size difference between the market for PCs and Macs (about 10 to 1) today Apple has more cash and marketable securities than the entire value of the historically supply-chain driven Dell Corporation.
Mr. Jobs is constantly pushing his organization to focus on the future, about what the markets will want, rather than the past and what the company has made. It was a decade ago that Apple created its "digital lifestyle" scenario of the future, which opened Apple's organization to being much more than Macs. Jobs obsesses about competitors and forces his employees to do the same, to make sure Apple doesn't grow complacent he pushes all products to have leading edge components. Mr. Jobs embraces Disruption, doesn't fear seeing it in his company, doesn't mind it amongst his people, and works to create it in his markets. And he makes sure Apple constantly keeps White Space projects open and working to see what works with customers – testing and trying new things all the time in the marketplace.
Following these practices, Apple pulled itself away from the Whirlpool and returned to the Rapids of Growth. Almost bankrupt, it wasn't financial re-engineering that saved Apple it was launching new products that met emerging needs. Apple showed any company can turn itself around if it follows the right steps.
As companies are struggling with value, people should look to Apple (and Google). Value is not created by cost cutting and waiting for the recession to end. Value is created by seeking innovations and creating an organization that can implement them. Especially Disruptive ones. Whether he's the CEO of the decade or not I can't answer. But saying he's one heck of a good role model for what leaders should be doing to create value in their companies is undoubtfully true.
by Adam Hartung | Oct 29, 2009 | Current Affairs, Innovation, Leadership, Television
I was intrigued to read about Apple proposing to rebuild a mass transit stop in Chicago in exchange for naming rights to the stop, as well as permission to advertise in the stop (Crain's Chicago Business – "Doors will open on the right at Apple stop.") Most people would ask "why?" And it's because Apple is moving toward a very different advertising future.
Most people think of advertising as the ads in newspapers and magazines, as well as on the radio, or television, or possibly billboards. Only we know that newspapers and magazines are failing because fewer people read them every month. Advertising in print media has limited value if there aren't any readers.
Likewise, people under 30 are watching a LOT less TV than the older generation. Whereas I grew up with my eyes on the "boob tube," increasingly I watch a lot less TV as I spend more time on the web. But my web use is nothing compared to people 17 to 34, who have almost abandoned television. They go to the web for entertainment. And they increasingly only watch TV shows and movies when they can download them – or possibly watch via DVD.
And Apple is at the forefront of killing the radio business. With iPods and digital music now cheap and plentiful, why listen to somebody else's programming? When you can program your own music, radio becomes less interesting. And if you want news there's the iPhone, Blackberry or similar mobile device to access the web – so why listen to talk radio?
Advertising as it was is gone. Coke, Pepsi, Procter & Gamble, Kraft, etc. built huge companies via media advertising. But media usage is declining sharply. So how do you get the message out to people who increasingly get their entertainment without using most of the traditional media?
And that's where Apple's move makes sense. By rebuilding a train station, they help promote their brand. It reminds me of when Hooters offered to fill the potholes in Chicago (a big problem) if they could put their company logo over them. This week I noticed that in the Newark, NJ airport the jetways had big billboards on the outside. And the TSA bins (for shoes, coats, laptops, etc.) had ads printed on the bottom. It's getting harder and harder to reach customers when they don't need traditional media.
So if you have historically been a big user of traditional media advertising, you'd better be rethinking that strategy. What worked in the past isn't going to work in 2015. Staying Locked-in to old ad budgets, and approaches, is going to keep producing declining returns. Traditional advertising won't even maintain current positions – much less work for new product launches. As ad costs go up, they are less effective. To reach customers requires shifting with the market.
If your new business plas is to use advertising as a way to grow your business, think again. While advertising isn't gone – it is a lot less effective than it was when traditional media was widely the source of information and entertainment. If you want to get people to recognize your brand, you have to start being a lot more clever. You have to find new ways to get in front of customers. You have to use your scenarios of the future to help you find the best way to promote your product. Because the old channels, and the ad firms that used to supply them, increasingly are an ineffective answer.
by Adam Hartung | Oct 27, 2009 | Current Affairs, Defend & Extend, General, In the Swamp, Innovation, Leadership, Lock-in, Web/Tech
"IBM authorizes another $5Billion for share buybacks" is the Marketwatch.com headline. This brings the amount available for buying the stock to $9.2billion – or enough to buy about 73.6million shares. But it begs the question, what value will this bring anyone?
"The U.S. Workplace: A Horror Story" is the CIOZone.com headline. A survey by Monster.com and The Human Capital Institute of more than 700 companies (over 5,000 workers) discovered that by and large, employees are mad at their employers. They don't trust business leaders, and think those leaders are exploiting the recession for their own purposes (and gains). 79% of workers would like to find a better employer – to switch – but only 20% of employers have a clue how many workers have become disillusioned.
Simultaneously, "Many vanished jobs might be gone for good" is the Courier-Journal.com headline. Historically, increases in manufacturing (usually led by autos) and construction (primarily housing) caused recessions to diminish. But nobody expects either of those sectors to do well any time soon. Manufacturing is showing no signs of improving, in any sector, as we realize that all the outsourcing and offshoring has permanently reduced demand for American labor. And quite simply, very few investments are being made by business leaders that will create any new jobs.
"ALL BUSINESS: Innovation Needed Even in a Recession" is the Washington Post headline. The article points out that almost all recent improvement in profitability – boosting the stock market – has been through cost cutting. But that has done nothing to help companies improve revenues, or improve competitiveness. It's done nothing to bring new solutions to market that will increase demand. Quoting the former Intel CEO Gordon Moore – "you can't save your way out of a recession" – the article cites several consultants who point out that companies which earn superior rates of return use recessions to invest in new technologies and innovations that create new demand. And eventually new jobs. But today's CEOs aren't making those investments. Instead, they are taking short-term actions that dress up the bottom line while doing nothing about the top line.
Which brings me back to IBM. Who benefits from $9.2billion being spent by IBM on its own stock? Only the top managers who have bonuses and options linked to the stock price. The shareholders will benefit more if IBM invests in new products and services that will increase revenues and drive up long-term equity. Employees and vendors will benefit from creating new solutions that generate demand for workers and components. Almost nobody benefits from a stock buyback – except a small percentage of leaders that have most of their compensation tied to short-term stock price.
What new innovations and revenues could be developed if IBM put that $9.2billion to work (a) at its own R&D, product development labs or innovation centers, or (b) at some young companies with new ideas that desperately need capital in this market where no bank will make a loan, or (c) with vendors that have new product ideas that could meet shifting markets?
That's the beauty of an open market system, it supposedly funnels resources to the highest rate of return opportunities. But this doesn't work if managers only cut costs, then use the money to prop up stock prices short term. It's a management admission of failure when it buys its own stock. An admission that there is nothing management can find worth investing in, so it will use the money to artificially manipulate the short-term stock price. For capitalism to work resources need to go to those new business opportunities that generate new sales. Money needs to flow toward new health care products and new technologies – not toward keeping open money-losing auto companies and failed banks that won't make loans.
If we want to get out of this recession, we have to invest in new solutions that will increase demand. We have to seek out innovations and fund them. We cannot simply try to Defend & Extend Success Formulas that are demonstrating their inability to create more revenues and profits. Laid off workers do not buy more stuff. We must put the money to work in White Space projects where we can learn what customers need, and fulfill that need. That in turn will generate jobs. And only by investing in new opportunity development will workers begin to trust employers again. IBM, and most of the other corporate leaders, need to "get it."
by Adam Hartung | Oct 19, 2009 | Defend & Extend, Disruptions, General, Innovation, Leadership, Web/Tech
The McKinsey Quarterly just published a new report "Where Innovation Creates Value." I think the consultant got paid by the word for this really long article, which boils down to a simple argument. It doesn't matter what kind of innovations are developed, or where innovations are created. What does matter is who implements them. The implementers gain the vast majority of the value from innovation. More than the patent holders or the countries where inventors live.
Historically America has been a hotbed for trying new things. America was advantaged over Europe because it didn't have the regulations and other innovation testing roadblocks. America was advantaged over Africa and much of South America because it didn't have a legacy of dictator governments and corruption that kept things from moving forward – blocking innovation. America was advantaged over China and India because it's per capita GDP has been very high, meaning there were ample resources to invest in trying new innovations. Thus, America has historically been an innovation testing grounds that has paid enormous dividends by keeping its companies on the leading edge of competitiveness.
But there is cause to worry. Recently I blogged about how companies were blocking employee access to social networking sites ("Letting the Bogeyman Hurt Your Business"). Concerned about employee efficiency, managers were blocking these sites so employees kept their fingers on the keyboards performing designated, approved tasks. Sort of Taylor-ish sounding, don't you think? In today's economy the value of smart employees is pretty high, but how do you know if they are smart if you block their access to tools. Is success more about how fast they do the tasks, or if they can figure out a better way that is inherently cheaper? Do you want employees doing the same thing better, faster, cheaper – or do you want them developing new solutions that are more competitive?
Consider the smart phone market, led today by the iPhone. And the new publishing media like Kindle and Sony's eReader. Soon we'll have plenty more of these products available that will increase knowledge access and speed of information flow making those who are connected even more competitive. According to SeekingAlpha.com, "Verizon's Droid is the Real Deal." New phones from Motorola with Google's Android operating system (get that, an operating system for your phone. Does that phrase not surprise at least a few people – some of whom might remember when phones had no intelligence – not even a dial tone?) will have an explosion of new applications and uses raising productivity and results.
Yet, how many companies are providing these devices and data access for employees? Most of the early adopters I see are paying for this out of their own pocket. The obvious concern is that American companies will remain focused on efficiency in this downturn. They will block access to parts of the web, and avoid technology investments for employees and customers. Meanwhile competitors in countries growing at 6-8%/year like China, India and Brazil will make these investments. If so, they become the early innovation implementers. And if that happens….. well that could be a very serious game changer. We can't assume the American economy will recharge if we don't apply innovations, and we can't assume competitiveness if companies from other places increase their adoption rates to exceed America's.
I don't see a lot of Disruption or White Space in America right now. Even top economists are bemoaning how businesses keep cutting employees and costs while the overall GDP does better. Business leaders seem stuck trying to Defend & Extend past business practices which aren't producing better results – and won't. They remain focused on cutting costs rather than innovating new solutions. But what we know is that the greatest return comes from a willingness to Disrupt and open up White Space to implement new solutions – in the process of making your own business a market disruptor that can grow and achieve superior rates of return.
by Adam Hartung | Oct 16, 2009 | Current Affairs, Defend & Extend, General, Innovation, Leadership, Openness
"Everyone talks about the need for innovation these days, but they especially talk about why businesses are so bad at it." That's the opening line from my newest column "The Myth of Efficiency" at Forbes.com. Today businesses seem to be struggling with innovation – preferring instead to cut costs and pursue efficiency. But we now know that the foundation for cost cutting as a route to better returns is based on faulty – in fact mythical – claims by Frederick Taylor and his devotees of "scientific management." Read this article if you ever wondered about the value of cost cutting compared to innovation – and learn why so many people "default" to actions that never make things better.
My column cites a great New Yorker article entitled "Not So Fast" on the faulty foundations upon which scientific management – and subsequently much of business education – is based. For an even deeper read into the mythical bases of Taylor and his crew pick up a copy of The Management Myth: Why the Experts Keep Getting it Wrong by Matthew Stewart (2009 W.W. Norton) available via the link at Amazon.com.
This is timely, because "Defining talent needs, managing costs central to workforce planning in 2010" is the headline from Mercer's own website about it's recent survey showing that the #1 factor in planning for human capital next year is managing cost!! How are we to grow out of this recession when people are cost obsessed? Especially now that we know cost cutting has no foundation as a basis for improving or sustaining returns? Certainly we now have good reason to challenge conventional wisdom as espoused in books like Cut Costs + Grow Stronger recently published by HBS Press.
If you are confronted with picking between cost cutting or innovating read this article, because your "gut" just might have been developed on faulty assumptions – leading you to make the wrong decision.
by Adam Hartung | Oct 14, 2009 | Current Affairs, In the Rapids, Innovation, Leadership, Openness, Web/Tech
"Samsung Seeks Some iPhone Magic" is the Wall Street Journal headline. Hand it to the Korean company to demonstrate how to make money out of market shifts. Not only is Samsung looking to add more capability to its mobile handsets – the obvious Defend & Extend action – but the company is developing applications for all its products to get into new, emerging markets. It is now adding internet capability into almost all the devices it designs, makes and sells.
Recognizing the market Challenge, in 2008 Samsung set up a White Space project with permission to explore just how it could coordinate software and content for cell phones. But quickly the team recognized this charter was not sufficient permission. They went back and asked to extend their opportunity development to everything Samsung makes (or considers making.) By making sure it had the right permission to really think broadly about the opportunities, this White Space team made sure it could really accomplish the greatest gains.
Kudos to the company for resourcing this effectively. Samsung did not reach into the different business lines and ask each one to devote "some" resource onto this project. That approach usually ends up getting almost no attention until year end when people remember this was on the checklist for bonuses. Instead Samsung dedicated resources – money and people. And Samsung made this into a business unit which is intended to make a profit!! This isn't just an experiment – a lab – it's White Space that is intended to figure out new opportunities, as well as the business model which would make these new innovations profitable.
Samsung is a company historically known for manufacturing skills, supply chain management and lower cost. Yet, it is showing that regardless of size (Samsung is one of the largest companies in Korea and one of the world's largest electronics companies) or history any company can establish White Space to connect with market shifts and introduce innovation.
Do you have White Space in your company? Or are you relying on your old Success Formula to return you to previous growth rates and profitability? What are you doing to take advantage of market shifts – like what's happening with iPhones, Kindles, Tablet devices and other innovations? You might want to take a tip from Samsung and set up some White Space with permission and resources to investigate how you could participate in market shifts to make more money!
by Adam Hartung | Oct 11, 2009 | Current Affairs, General, Innovation, Leadership
Saturday I had the good fortune to attend a presentation by President Bill Clinton. He spoke at the Indian Institute of Technology alumni conference – an event I attended as a speaker myself.
President Clinton must have used the word profit 100 times. In today's divided political climate with words like "socialism" bandied about you might be surprised. But his talk focused on the importance of making a profit as businesses meet customer needs.
The 42nd President discussed how new fish farms in Haiti were important to improving the devastated economy – because they allowed everyone involved to make a profit. He discussed how forests devastated for charcoal were being replaced by a new business that converted used paper and sawdust into a charcoal replacement for 75% less cost to the user — and yet created over 100 good paying jobs and produced a profit. His point was simple, you can't fix a down-and-out country's economy unless there is a profit in it. And he was seeing, through his foundations, multiple profit opportunities.
Across the board, the President reminded listeners that they can maintain the profit motive and solve big problems if they think about the business differently. American competitiveness is seriously challenged by rising health care costs. Yet Pennsylvania has shown it can contain costs by reporting cost and outcome statistics – a practice not shared in the other 49 states. Switzerland has a private health care system, and it incorporates wellness programs, but it spends only 11% of GDP on health care. The U.S. spends 17%. The U.S. needs to rethink how health care is sold and administered first – and if it does that private enterprise can continue to lead. But it takes a shift on the part of the health care insurers and providers.
After many years as the country with the highest percentage of college graduates in the 25 to 34 age group, in the last 8 years America has fallen to 10th. America has priced college out of the range of too many students, while other countries have modifed their approach and improved completion rates. To improve competitiveness requires an educated society. It takes different thinking if America is to regain strength as an educated country. Now that American competitiveness is being challenged (the theme of this meeting) the former President challenged whether that competitiveness can be regained if we don't think differently about how we provide education.
Of all his comments, I most enjoyed his discussion about how much . Americans love zero sum games. He and then pointed out that almost all games (football, soccer, etc.) have been modified to allow for overtimes so somebody wins. He brought up an Arkansas football game that went to 7 overtimes! Americans hate non-zero sum situations, where multiple people can win, or where it's possible to win by doing things differently. But he pointed out that in life, almost nothing is a zero sum game. That is limited to the sports field. Even in battles, it's often not clear who the winner is – for both sides will declare victory. He commented "all economic systems carry the seeds of their own destruction." And when it comes to succeeding in business you don't need to create a zero sum game. You can succeed by doing things differently.
Far too many business gurus discuss business like it is zero sum. For example, Jim Collins' BHAG and his love of fighting for a "hedgehog" concept is all about viewing business as a zero-sum game that you have to win. But today most growing, high return businesses intentionally avoid zero-sum games. Those lead to price wars and declining returns. Instead they (like Google) employ innovation, like the folks making charcoal from recycled paper, to develop new solutions that are superior and earn higher returns.
by Adam Hartung | Oct 8, 2009 | Current Affairs, General, Innovation, Leadership, Lock-in, Web/Tech, Weblogs
"Companies Say No to Friending or Tweeting at Work" is the headline in The National Law Journal. According to the article, somewhere between 54% (according to a Robert Half survey) and 76% (according to a ScanSafe survey) of companies block employees from connecting to social networking sites like Facebook, Twitter, Linked-In, Plaxo, etc. The reasons sound so traditional – starting with lost productivity and moving on to fear of data theft.
And of course, there's the bogeyman to worry about too.
In the 1940s and 1950s success was all about mass production. Show up for work on time, don't be late, don't be absent, and do your job. We had assembly lines to operate. Making stuff meant we needed to get people into the plant, and have them do their job. The more efficient people were, the more things a plant could make – be it cars or washers or televisions. So control everything the employee did on the job to make sure each minute is spent welding, typing, adding, inspecting or whatever their task. Fredrick Taylor became a business guru, running around with stopwatches calculating how to get more work out the door by controlling everything workers did.
Have people noticed that its 2009? Today, there are places where such focus on task implementation is important. But most of those places aren't in the USA. Those kinds of jobs have moved elsewhere. Even in America's manufacturing plants (and in most plants in the developed world) it is more important that an employee be thinking about their work. More gains are made by intelligent application – new ideas for processes or activities – than from Tayler-ist style efforts to whip people into working harder and more efficiently. Would you rather have a drone employee (a human robot) or a smart employee thinking about how to be more productive and successful? Sweat shop behavior doesn't make more money in a world where intelligence and insight are worth a lot more than hours in the chair.
Yet Lock-in to old efficiency notions still remain. In the 1930s there was a movement to ban adding machines for fear the tapes (the old white tape that ran out the top) would be stolen by employees. Better to stick with humans doing the adding – less risky. When PCs came along practically all IT departments wanted to ban them – saying that they posed an inherent risk to productivity (people might use them for things besides work) and employees would capture data on them and leak it to competitors. When the internet emerged in the 1990s huge numbers of employers banned access because they didn't know what people would do on the web and they feared everyone would be shopping all day, or emailing their friends. And who knew what kind of information they would leak about the company! In each instance, a tool that dramatically improved business performance was met with "this will hurt productivity. And don't you think this poses a serious risk?"
For those who aren't looking for the bogeyman, this presents an opportunity. Those who first adopted adding machines quickly improved performance – and those who adopted PCs improved productivity (spreadsheets and word processing gave early adopters huge advantages) – and those who adopted the internet rapidly sold more to new customers while finding more low cost suppliers and automated lots of business processes in their supply chain taking down operating costs. These innovations created Challenges to old ways of doing things, but they also created huge opportunities for those willing to Disrupt old patterns and use White Space to see how they could improve their business.
Every day millions of people are starting to use – and millions more are increasing their use of – social networks. You can get an incredible sense of the pulse of many communities. You find out what's going on with customers, potential customers and colleagues incredibly fast. These networks help sift through billions of megabytes of data and bring critical items of importance to you (and your business) remarkably fast. They act as a new distribution system for information – think of them as a water cooler on steroids taken to the "nth" power. These are not on-line solitaire environments, these are places where people exchange information and learn. Really fast.
Today, having informed employees who can take action separates winners from losers. Those who want to be in the forefront of competition are already thinking about how these environments connect them with critical information. Help them connect to customer and vendor communities. Help them improve productivity by increasing the pace of information exchange. If you aren't afraid of the bogeyman then you have an opportunity to get a leg up on the fearful by not only accepting, but encouraging the use of social networks. The faster you "get it" the better off you'll be. It's likely to introduce ideas for Disrupting your business during this downturn and opening White Space to get you growing again!
Postscript –
An article in the recent New Yorker Magazine "Not So Fast" takes a deep look at Fredrick Taylor and the history of "scientific management." According to the article, Taylor and his colleagues often made up their data, and their conclusions, and the results they promised were almost never achieved. Interesting reading on how the myth was created, and became legend. Perhaps sending most of what was taught for decades as "business best practice" at leading business schools in a seriously misguided direction. Well worth a read for those with time to pick up a little history – and some insights to how business myths are developed and promulgated.
