Sometimes management behavior can cause outsiders to think the industry and company leaders fear growth.  Take for example a new book about innovation in the movie business Inventing the Movies by Scott Kirsner (see at Amazon here or read a review in Forbes here.)  As the author points out, after Edison invented the first Kinetiscope movies – which were small viewer-based single person devices – he saw no reason to move forward with a projection system.  Why advance the innovation when multiple audience members appeared to risk the revenue?  To Edison, he could assure each and every viewing created a payment with his single-viewer technology, but the audience viewership meant he would lose control and possibly see revenue cannibalized.  Fear of cannibalization caused him to avoid new innovations which would grow total demand, and considerably grow the revenues of his fledgling movie business.

But we all know this didn’t happen.  Projection systems only caused more people to want to go to the movies.  Then when talking movies came about again the industry feared that investing in sound equipment would be a cost not recovered and they delayed and delayed.  But talking films again increased the audience.  And this cycle played out again with color movies.  And lest we not forget the wars that were fought over video tapes of movies, which all industry leaders feared would kill the business.  Yet, videos (and now CDs) have only increased the audience, and demand more. 

All businesses develop a Success Formula early in their life cycle.  That Success Formula ties the Identity of the business to its strategy and tactics.  So a tactic as simple as having a single-viewer kinetiscope becomes almost impossible to change because it gets linked to the identity of the business (and often its founder – in this case Edison).   Thus it takes a new entrant, often from outside the industry, to parlay the new technology into the market.  This new entrant, not afraid of controlling the business through administration of an old Success Formula, is able to bring forward the new technology/solution and build the new audience/demand.  And often we see the old industry leader far too late to change – stumbling, fumbling and failing.

Businesses need not follow this course, however.  If they are willing to invest in White Space they can test new solutions.  They can figure out new Success Formulas.  They can evolve, and they can grow.  Doing so isn’t really hard, it just takes a willingness to accept the requirement for White Space to take advantage of market shifts.  White Space allows you to migrate forward, rather than constantly fall back into Defending & Extending what you’ve always done. 

As we all know, each innovation in the movies has grown the industry, not been its doom.  And that’s true in all industries.  Yet, the largest players are rarely the ones who lead these shifts.  Look at how it took Apple to bring about the revolution in digital music, rather than Sony.  Lock-in gets in their way.  If we want to avoid being pummeled by market shifts that create great growth opportunities for the new competitor we have to be vigilant about implementing and maintaining White Space that can provide our beacon for growth.

Where’s your organization’s White Space?

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