by Adam Hartung | Jul 27, 2010 | Current Affairs, Leadership, Web/Tech
Leadership
Stop Focusing On Your Core Business
It has become the fast track to oblivion.
“Where Have All the Flowers Gone” was a 1960s antiwar hit for Peter,
Paul and Mary. The “flowers” meant soldiers dying in Vietnam. These days we might be tempted to sing,
“Where Have All the Mighty Corporations Gone?”
That is the first paragraph to my latest column for Forbes magazine. A laundry list of notable failures the last few years is driving home the point that “focus on your core” is insufficient to even survive – much less thrive! And don’t blame “the government” for these failures – as all were related to management decisions intended to keep the company “on track.” Instead, these leadership teams “doubled down” on the old Success Formula until there just wasn’t any more juice left in that orange!
On the other hand, Apple demonstrates the value of seeking out new markets. “The iPad is Already Bigger than the iPod — and Half as Big as the Mac” is the Business Insider article.
Silicon Alley Insider 7-21-10
By distinctly not focusing on its core, and instead entering new markets, Apple — and Google as well — keep right on growing. Ignoring the “Great Recession.”
So is your business strategy intended to have you keep doing more of the same? Hoping if you do more, better, faster, cheaper things will return to the sales and profit growth of an earlier time? Or are you entering new markets, putting out new solutions that meet emerging market needs? Are you planning for a past era to return, or for the emerging future? Do you use scenarios, or historical trend lines? If you are hoping to be glorious by focusing on your core, give this Forbes article a read. You just may decide to change course.
by Adam Hartung | Jul 26, 2010 | Current Affairs, Defend & Extend, Food and Drink, In the Swamp, In the Whirlpool, Leadership, Web/Tech
“Blackberry’s Era May Be Ending” is the New York Times title on a Reuter’s story about the pioneering leader in smartphones. That RIM is in trouble is undoubtedly true – so much so it will not likely survive as a stand-alone company, if it survives at all! The company is in a growth stall, with U.S. market share in the first quarter dropping to 41% from 55% last year. Selling cheaply priced products outside the U.S. has masked the deep revenue problem developing at RIM – as the company tries to convince investors that it really isn’t falling way behind new competitors.
It was just April 8 when I published on this blog “Enterprise Customer Risk” in which I described how Blackberry’s ongoing focus on corporate customers allowed it to fall far behind in the applications development area ( see the 2 critical charts in previous blog showing the application weakness as well as market share problems). Now Apple has 30 TIMES the number of apps available on the Blackberry. On January 10 in “Winners and Losers from Shifts” this blog posted a chart showing how Apple hit 1 billion application downloads in its first 14 months of iPhone sales. Two weeks ago MediaPost.com reported “Android Hits 1 Billion Downloads.” Android now has about 100,000 apps, while Apple has about 225,000 apps. RIM doesn’t even have 10,000 apps.
RIM made a huge mistake. It focused on its core market of enterprise Blackberry customers. It tried to Defend its historical market share by focusing on its historical customers – and ignoring the smartphone non-user markets being developed by Apple (and now Google.) As a result it’s price/earnings multiple has fallen to 10 – amidst clear indications that RIM is unlikely to ever regain much growth as this growth stall continues.
We might like to think this sort of rapid problem creation is limited to technology companies. Unfortunately, not so. Crain’s Chicago Business today reports that “Kraft Foods Sees Slowdown in U.S. Cookie and Cracker Sales, Complicating CEO Rosenfeld’s Growth Agenda.” Kraft has had no measurable organic growth for over a decade, nor successful entries into new markets. The last year Kraft’s CEO demonstrated no commitment to organic growth by putting all her energy into the acquisition of Cadbury in order to expand Kraft’s “core” market position – dominated by Oreo, Chips Ahoy, Ritz Crackers and Wheat Thins. But now sales for the last quarter in the historical business are down 3.8%!
Kraft is another example of what happens when a company hits a growth stall. It may have a few up periods, but overall it is 93% likely to never again consistently grow at a mere 2%! Defend & Extend management uses obfuscation, like acquisitions, to hide underlying problems in the company’s ability to meet changing market needs. Resources are poured into price cutting promotions and advertising, looking only at the marginal cost and the initial sales, which props up the over-spending on worn out products in a worn-out Success Formula – and in Kraft’s case even these aren’t able to keep customers buying brands that are over 50 years aged. Ms. Rosenfeld will try to keep everyone’s attention on the top-line, hoping they forget that “growth” was manufactured by acquisition and that in fact both sales and margins are deteriorating in the “core” brands.
So, are you still trying to find your growth in this “Great Recession” by doing more of what you’ve always done – hoping customers will for some reason flock to your old way of doing business? That, quite frankly, has almost no hope of working. Customers are looking for new solutions every day. If you focus on protecting old markets, maybe by asking old customers what to do, you’ll miss the emergence of new markets where underserved customers are creating all the growth. If you don’t have plans to expand your business by 20% or more in new markets across the next 2 years you have more chance of burning up your resources than growing – and you might well end up like GM, FAO Schwarz or Sharper Image!
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 22, 2010 | Current Affairs, Lock-in, Web/Tech
“You are Not Your Vendor” is the title of my most recent column published in CIO magazine and Network World magazine. You’ll read in the article why it is critical you never rely too heavily on a vendor. As much as we’d like to say we’re “partners,” reality is that the vendor/customer relationship is adversarial. It’s up to everyone to constantly try new solutions, because lock-in to a vendor can cost you dearly when a competitor moves to a better solution that might be faster and/or cheaper. Your competitiveness relies not only on your adaptability, but that of those who supply you. This is extremely true in IT, where product lifecycles are often very short. But it’s true in all vendor relationships. It’s important all businesses overcome vendor Lock-in to avoid carrying too much legacy cost, and to continuously explore better solutions that can help you enhance – possibly redefine – your Success Formula.
Along this line, I thought it might be fun to list the top 10 Vendor Lies I’ve heard in my career – often ignored at great cost:
- Of course our application is 100% compatible with that
- That feature was in the demo, and will be available to you in just 3 weeks after purchase
- Our customer service people are some of our best trained engineers
- That problem only exists in the demo – it won’t happen in your installation
- Your installation will be on-time and on-budget
- We never point our finger at another vendor if you have a problem
- Working with an outsourcer is easier than doing the work yourself
- Our prices are firm, we never discount at end of quarter
- We can seamlessly integrate into your business – you’ll never see a glitch
- With our product strength, we’ll never go out of business
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 4, 2010 | Current Affairs, Leadership, Web/Tech
Hi Readers, I’m delighted today to send you a guest blog from a colleague of mine, Tom LaPlante. His contact info is below. I hope you enjoy his insights as much as I did!
Recently I attended the Austin Tech Fair, which was hosted and planned by Matt Genovee’s Door 64 and Austin Technology Council. Excellent gathering of central Texas technology companies and individuals. The main topic of the panel discussions centered around Social Media — in terms of hiring, what it means for a company’s policies, the legal issues (many of which are yet to even be identified) and how employees are using various types of social media (Facebook, Twitter, Linked-in, etc.) at and during work hours.
The last panel session of the day was “Today’s Technology Tools and Social Media to Growing Business.” This session was supposed to last 50 minutes, however after almost 2 hours many attendees were still having a “Q & A” with the panel members — highlighting the importance, confusion and multitude of issues facing corporations in how these companies are in many cases NOT dealing with social media in the workplace.
The most alarming piece of information given by one of the panel members was, “fully 40% of companies surveyed do not have and do not yet plan to publish any internal policies or guidelines” on social media usage within their company. It almost seemed that many leaders (including CIO’s) didn’t want to be “bothered” by this latest trend — Social Media — and maybe, just maybe, think this is a fad that will go away.
This attitude and approach reminds me of the early days of the internet explosion and email adoption. Many executives didn’t want to “get in front” and lead the way, but wanted to control or even suppress these “new fangled toys”. Just further examples of the Defend and Extend mentality that company leaders oftentimes take. Some thought that the internet and email would distract employees, lower productivity and weren’t sure how it would help their business. Those that led and “got in front” of these new tools did realize productivity gains and developed new markets and channels because of them. Seems silly looking back now that corporations actually tried to suppress the use of these two examples.
Granted, I’m sure there were cases of misuse by employees and that some individuals did have lower productivity in certain cases. But those companies that created and communicated clear guidelines on proper and effective use of the internet and email were better enterprises than those that did not. Any new technology, tool, or process requires leadership and communication from management of what’s to be expected as appropriate usage/behavior. This is an opportunity for leaders to engage their workforce, see what makes sense, determine policies that are appropriate and create a more streamlined work environment. However, it doesn’t just happen, leaders must actually lead and engage to make the most effective use of this and anything else new.
So what’s going to be YOUR approach in regards to Social Media in the workplace? Are you going to try to limit it, control it or suppress it altogether? Guess what? This approach will not work in today’s marketplace and workplace. Whether you’re a fan of Facebook or not, Facebook appears that it’s here to stay. Even if Facebook were to be displaced by another platform, social media is NOT going away.
Today’s economy and marketplace shifts are happening at an ever faster pace. Technology trends seem to “suddenly” popup out of nowhere. Your employees and customers are going to utilize this “new stuff”. Now the choice is yours. Do you get in front of this and lead your companies policies on appropriate and effective social media usage or do you wait to see the dust clear? We recommend that company leaders start now to publish company guidelines if you don’t have any, review and update the ones you do have, and re-visit these at least semi-annually to gauge the relevancy of your social media Policy. If you don’t then your employees will develop their de-facto policies.
Great stuff Tom. Connect with Tom via Twitter – find him @ Tomlap. Or connect with him on Facebook Tom Laplante. or look for him on Linked-in Tom LaPlante.
If any readers would like to guest blog, just let me know. I’m always interested in new insights – and enjoy hearing from colleagues who want to help businesses grow!
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 | Jul 1, 2010 | Current Affairs, Defend & Extend, In the Swamp, Leadership, Lock-in, Web/Tech
"Stay the Course" is a popular phrase. It sounds all macho, and committed to a destiny, to proclaim you must "stay the course." However, as bnet.com pointed out there are times when "Stay the Course is a Recipe for Disaster." The article calls it "Stay The Course-Itis" (or STCI) for leaders that don't know when it's time to change direction. We can now see that BP simply drilled one too many deep-water holes in the Gulf – just as Exxon let one too many tipsy captains steer oil vessels before the Valdez crashed. Staying the course may sound good, but too often the course isn't right. And a bad course can lead you into disaster.
Take for example Dell. As reported by The New York Times, and picked up by CNBC.com, "in Suit Over Computers, Window into Dell's Fall," we learn that Dell went just a bit too far in its effort to be a low cost industry supplier. Hoping desperately to maintain a slight lead in lowering costs, Defending & Extending Dell's long-term Success Formula as industry supply chain leader, Dell simply bought bad parts. It then replaced bad product with more bad product. Refused to admit to itself that it had gone "too cheap" in its effort to be cheap. Things went from bad to worse as the Lock-in to keep costs low led to multiple customer disasters – even at the law firm defending Dell in court! And Michael Dell is being accused of financial irregularities in his effort to make Dell's results possibly look better than they were. Both corporately and personally leadership made some big mistakes – not unlike BP – in the effort for Dell to "Stay the Course."
Microsoft certainly isn't without it's STCI as CEO Steve Ballmer keeps dropping new projects to funnel money and other resources into old desktop/laptop products. The Wall Street Journal reported "Microsoft Kills Kin Mobile Less Than Two Months After Launch." Kin was a product targeted at the hot market for youthful cell phone users. A double-digit growth market. But Microsoft is backing out, despite its ballyhooed launch – including announcements to take the product to China very soon. Microsoft can't seem to do much but "Stay the Course" supporting old products.
Both tech companies have had no improvement in their market value the last decade. And BP has watched its value drop more than 50% since the spill started. Some now actively wonder if BP could disappear as SeekingAlpha.com discussed in "How Likely is a BP Takeover bid?" Staying the course in the Gulf, drilling for more oil in deeper water and taking on more risk, could cost BP its existence if another company buys up the discounted equity. Of course, there is still reason to think BP could get wiped out from the costs of the disaster without a takeover.
Companies can get over SCTI if they follow advice given at ABCNews.com "Reboot Your Small Business by Reinventing." The article applies to all size businesses, however. When you see your business doing poorly, especially relative to competitors, it's time to attack sacred cows and do some things differently. Instead of "doubling down" on the old Success Formula, do new things!
You don't want to end up like BP, Dell or Microsoft today. Once great companies that are floundering now – struggling to find growth as they continue spending so much energy trying to "Stay the Course." When the seas are too calm to sail, leaving you stranded with no growth, or the waves are crashing too heavily, as competition is derailing your efforts, why not set a new course? One that can lead you to better growth? There's no harm, or shame, in heading where the market is going, using Disruptions and White Space to develop new solutions. Don't let your ego, pride, or history/legacy push you to "stay the course" when better results can be found in new markets, new customers and new solutions.
PS – Yesterday SmartBrief on Leadership newsletter ran ""For Real Innovation, Pick Up the Phone" linking to the BloggingInnovation.com repost of "It's the One You Don't See That Kills You." Compliments to Braden Kelley for a great web site, and getting the word out about how important it is to apply innovation! I enjoyed how the newsletter grabbed the conclusion, that businesses need to obtain more outsider input, and ran with it as the title. better than my title, to be honest!
PPS – PRLog.org just picked up my blog on "Journalism in 2020." Great to see the media enjoying my comments about their industry, and passing them along through this communication site!
by Adam Hartung | Jun 22, 2010 | Current Affairs, Defend & Extend, In the Swamp, Leadership, Lock-in, Web/Tech
According to Reuters news service "Dell in Talks with Google over Chrome O/S." I would like to think this is a big deal for Dell, and positive, but I'm doubtful.
Eight months ago I wrote (10/20/09 – Keep an Eye on Dell – Good Things Happening) that Dell's efforts to bring a smart phone to market showed real promise for the company. Michael Dell seemed committed to shaking things up in order to launch new products. And in February I wrote (2/22/10 Looking for Winners – Dell) not to be too worried about Dell's small desktop market share losses because Dell needed to be heading into new markets – like Smart phones – seeking growth rather than over-investing in its old desktop business.
But I've since turned much more negative. The Reuter's article points out that Dell still hasn't gotten the smart phone to market in the USA. A phone was released in China last year, but sales have been minimal. There is a vague promise (no date) to release a new product in China – but none in the USA. And a potential tablet (competitor to iPad) is considered by end of 2010, but the company stresses no firm date.
Dell is moving far too slowly, and is far too uncommitted, to new businesses. The company is listening to the analysts who have traditionally followed them – the large customers who have bought Microsoft products and are still doing so – and large vendors who want to maintain the status quo. All of these folks are as locked-in as Dell.
Meanwhile Apple and Google keep selling thousands of units into these rapidly expanding new markets, growing share as well as sales at substantial profit.
This effort by Google is certainly good for its Chrome O/S. Even if Dell moves slowly, having Chrome adopted into any part of the historically monopolistic Microsoft community is a good thing. And the announcement itself shows the fragility of Microsoft in its historical market as growth slows and large distributors look to new solutions for "cloud computing" from new vendors. So this is good for Google, and another dart into the wounds of Microsoft.
The market keeps shifting toward new technology and the vendors supporting it – making the re-invention gap bigger and bigger at Dell. I don’t think Dell’s management is up to the market challenges. They had a shot at real change, but by not giving the growth projects (then or now) real permission to do what it takes to succeed, including moving much faster to market, nor sufficient resources to meet market needs, Dell is hastening its own demise. With its outdated, and now low-return, success formula firmly locked in, Dell looks likely to follow Wang, Lanier, Burroughs, DEC, Silicon Graphics and Sun Microsystems into the history books.
