Neil Armstrong’s Legacy – More Important Now Than Ever

Neil Armstrong, the first man to step on the moon died last Saturday.  Overall, I was surprised at just how little attention this received.  The Republican convention, Hurrican Isaac and many other issues dominated the news, even though Neil Armstrong represents something that had far more impact on our lives than this hurricane, or anyone attending this convention.

Neil Armstrong represents the adventurous spirit of an innovator willing to lead from the front.  The advances in flight, and space travel, might have happened without him – or maybe not.  Neil Armstrong was willing to see what could be done, willing to experiment and take chances, without being overly concerned about failure.  Rather than worrying about what could go wrong, he was willing to see what could go right!

Most of us forget that it has been only 110 years since the Wright brothers made their 12 second, 120 foot flight at Kitty Hawk, North Carolina.  Before that, flight had been impossible.  Now, in such a short time, we have globalized travel.  My father, born in 1912, lived in a world with no planes – or much need for one.  I now live in Chicago largely because of O'Hare airport and its gateway (almost always in one leg) to any city.  Flight has transformed everything about life, and the world owes a lot to Neil Armstrong for that change.

Neil Armstrong became a pilot at 15 and spent a lifetime pushing the envelope of flight.  He not only flew planes, but he obtained an aeronautical engineering degree and used his experiences to help design better, more capable planes.  His history of try, fail, test, improve, try, succeed is an example for all leaders: 

  1. Firstly, know what you are talking about.  Have the right education, obtain data and apply good analysis to everything you do.  Don't operate just "from your gut," or on intuition, but rather know what you're talking about, and lead with knowledge.
  2. Second, don't be afraid to experiment, learn, improve and grow.  Don't rest on what people have done, and proven, before.  Don't accept limits just because that's how it was previously done.  Constantly build upon the past to reach new heights.  Just because it has not been done before does not mean it cannot be done.

Beyond his own leadership, Neil Armstrong is – for much of the world – the face of space travel.  The first man on the moon.  And that was only possible by being part of, and a leader in, NASA.  And we could desperately use NASA today.  It was, without a doubt, the most successful economic stimulus program in American history – even though politicians have been moving in the opposite direction for nearly 2 decades!

NASA offered Americans, and in fact the world, the opportunity to invest in science to see what could be done.  By setting wildly unrealistic goals the organization was forced to constantly innovate.  As a result NASA created and spun off more inventions creating more jobs than Eisenhower's interstate highway program and all other giant government programs combined. 

NASA's heyday was from the John Kennedy challenge of 1961 through the lunar landing in 1969.  Yet since 1976 alone there have been over 1,400 documented NASA inventions benefiting industry!!  Not only did NASA's experiments in flight aid physical globalization, but it was NASA that developed wireless (satellite based) long-distance communications – which now gives us nearly free global voice and data connectivity.  And the need to solve complex engineering problems pushed the computer race exponentially, giving us the digital technology now embedded in almost everything we do. 

Consider these other NASA innovations that have driven economic growth:

  • The microwave oven, and tasty, desirable frozen food used not only in homes but in countless restaurants
  • Water filtration for cities and even your refrigerator reducing disease and illness
  • High powered batteries – for everything from laptops to cordless tools to electric cars
  • Cordless phones, which led to cell phones
  • Ear thermometers (for those of us who remember using anal thermometers on sick babies this is a BIG deal)
  • Non-destructive testing of rockets and other devices led to what are now medical CAT scanners and MRI machines
  • Scratch resistant lenses now used in glasses, and invisible, easy to adjust braces at prices, adjusted for inflation, considered impossible 30 years ago
  • Superior coatings for cookware, paints and just about everything

As the American economy sputters, southern Europe looks to drag down economic growth across the continent, and growth slows in China the need for economic stimulus has never been greater.  But far too often politicians reach for outdated programs like highways, dams or other construction projects.  And monetary stimulus, in the form of lower interest rates and easier money, almost always goes into asset intensive projects like factories – at a time when capacity utilization remains far from any peak.  We keep spending, and making money cheap, but it doesn't matter.

We have transitioned from an industrial to an information economy.  Effective economic stimulus in 2012 cannot happen by creating labor-intensive, or asset-intensive, programs.  Rather it must create jobs built upon the kind of value-added work in today's economy – and that means knowledge-intensive work.  Exactly the kind of work created by NASA, and all the subsidiary businesses born of the NASA innovations.

Nobody seems to care about going to space any more.  And I must admit, it is not my dream.  But in one of his last efforts to help America grow Neil Armstrong told a Congressional committee "It would be as if 16th century Monarchs proclaimed we need not go to the New World, we have already been there." He was so right.  We have barely begun understanding the implications of growth created by exploring space.  Only our imaginations are limited, not the opportunity.

What Neil Armstrong told us all, and practiced with his actions, was to never stop setting crazy goals.  Even when the immediate benefit may be unclear.  The journey of discovery unleashes opportunities which create their own benefits – for society, and for our economy.  Losing Neil Armstrong is an enormous loss, because we need leaders like him now more than ever.

Why Sun Failed – unwillingness to adapt

"With Oracle, Sun avoids becoming another Yahoo," headlines Marketwatch.com today.  As talks broke down because IBM was unwilling to up its price for Sun Microsystems, Oracle Systems swept in and made a counter-offer that looks sure to acquire the company.  Unlike Yahoo – Sun will now disappear.  The shareholders will get about 5% of the value Sun was worth a decade ago at its peak.  That's a pretty serious value destruction, in any book.  And if you don't think this is bad news for the employees and vendors just wait a year and see how many remain part of Oracle.  A sale to IBM would have fared no better for investors, employees or vendors.

It was clear Sun wasn't able to survive several years ago.  That's why I wrote about the company in my book Create Marketplace Disruption.  Because the company was unwilling to allow any internal Disruptions to its Success Formula and any White Space to exist which might transform the company.  In the fast paced world of information products, no company can survive if it isn't willing to build an organization that can identify market shifts and change with them

I was at a Sun analyst conference in 1995 where Chairman McNealy told the analysts "have you seen the explosive growth over at Cisco System?  I ask myself, how did we miss that?"  And that's when it was clear Sun was in for big, big trouble.  He was admitting then that Sun was so focused on its business, so focused on its core, that there was very little effort being expended on evaluating market shifts – which meant opportunities were being missed and Sun would be in big trouble when its "core" business slowed – as happens to all IT product companies.  Sun had built its Success Formula selling hardware.  Even though the real value Sun created shifted more and more to the software that drove its hardware, which became more and more generic (and less competitive) every year, Sun wouldn't change its strategy or tacticswhich supported its identity as a hardware company – its Success Formula.  Even though Sun became a leader in Unix operating systems, extensions for networking and accessing lots of data, as well as the creator and developer of Java for network applications because software was incompatible with the Success Formula, the company could not maintain independent software sales and the company failed. 

Sort of like Xerox inventing the GUI (graphical user interface), mouse, local area network to connect a PC to a printer, and the laser printer but never capturing any of the PC, printer or desktop publishing market.  Just because Xerox (and Sun) invented a lot of what became future growth markets did not insure success, because the slavish dedication to the old Success Formula (in Xerox's case big copiers) kept the company from moving forward with the marketplace

Instead, Sun Microsystems kept trying to Defend & Extend its old, original Success Formula to the end.  Even after several years struggling to sell hardware, Sun refused to change into the software company it needed to become. To unleash this value, Sun had to be acquired by another software company, Oracle, willing to let the hardware go and keep the software – according to the MercuryNews.com "With Oracle's acquisition of Sun, Larry Ellison's empire grows."  Scott McNealy wouldn't Disrupt Sun and use White Space to change Sun, so its value deteriorated until it was a cheap buy for someone who could use the software pieces to greater value in another company.

Compare this with Steve Jobs.  When Jobs left Apple in disrepute he founded NeXt to be another hardware company – something like a cross between Apple and Sun.  But he found the Unix box business tough sledding.  So he changed focus to a top application for high powered workstations – graphics – intending to compete with Silicon Graphics (SGI).  But as he learned about the market, he realized he was better off developing application software, and he took over leadership of Pixar.  He let NeXt die as he focused on high end graphics software at Pixar, only to learn that people weren't as interesed in buying his software as he thought they would be.  So he transitioned Pixar into a movie production company making animated full-length features as well as commercials and short subjects.  Mr. Jobs went through 3 Success Formulas getting the business right – using Disruptions and White Space to move from a box company to a software company to a movie studio (that also supplied software to box companies).  By focusing on future scenarios, obsessing about competitors and Disrupting his approach he kept pushing into White Space.  Instead of letting Lock-in keep him pushing a bad idea until it failed, he let White Space evolve the business into something of high value for the marketplace.  As a result, Pixar is a viable competitor today – while SGI and Sun Microsystems have failed within a few months of each other.

It's incredibly easy to Defend & Extend your Success Formula, even after the business starts failing.  It's easy to remain Locked-in to the original Success Formula and keep working harder and faster to make it a little better or cheaper.  But when markets shift, you will fail if you don't realize that longevity requires you change the Success Formula.  Where Unix boxes were once what the market wanted (in high volume), shifts in competitive hardware (PC) and software (Linux) products kept sucking the value out of that original Success Formula. 

Sun needed to Disrupt its Lock-ins – attack them – in order to open White Space where it could build value for its software products.  Where it could learn to sell them instead of force-bundling them with hardware, or giving them away (like Java.)  And this is a lesson all companies need to take to heart.  If Sun had made these moves it could have preserved much more of its value – even if acquired by someone else.  Or it might have been able to survive as a different kind of company.  Instead, Sun has failed costing its investors, employees and vendors billions.