The vicious circle of hyper-visionaries

When a business fails, it’s relatively easy to explain in 3 broad steps what led to this failure and what should have been done.

Of course, if you had been there it probably would have been different… whatever… what a bunch of…

This attitude of intellectual superiority may be pleasant, but it happens to be totally mistaken.

This article opened my eyes.  I plead guilty.  I have to confess that whether through a blog or simply because people ask for your opinion, there’s a tendency to reply without necessarily being familiar with the whole context.

Think Kodak, Blackberry, Microsoft and many others…

The company heads are not there by accident

Just in case you were wondering, these companies are not run by idiots living in caves.  But sometimes, when you’re afraid of upheaval, it becomes a self-fulfulling prophecy.  If you spend too much time searching for sources of upheaval, you risk losing sight of the very essence of your business.

In parallel, there is the threat of the innovator’s dilemma, which I learned about in this article.  To summarize, there are 2 types of sustainable technologies : those that allow us to improve on what we’ve done (businesses are very good at integrating this type), and disruptive technologies that rarely answer a market need and don’t correspond to any economic reality when they are launched.  These disruptive technologies often deteriorate the final product from the onset (take music, for example.  We have never listened to such poor quality since the advent of MP3 and the headsets we use).

Big companies have much more difficulty integrating this second type.

innovator dilemna

Kodak is a perfect example of this.  Assuming that their top management understood from the start that digital would forever change the face of their industry, they went way too far.

Instead of developing digital cameras (which produced lesser-quality images at the time), they attempted to connect their existing non-digital cameras to the internet.

As a result, they invested in picture-sharing on existing sites, paying top dollar.  They were so intent on doing well and disrupting their activity that they totally missed the boat on the simple and quick photography that is the key feature of digital cameras.  Canon, for instance, immediately understood this concept… and you know how the story ends…

Instead of spending fortunes in softward, service and R&D, they should have invested in their core skill : making cameras.

It’s the same story with Microsoft.  The company went so far as to eliminate the term “software” from its strategy, despite the fact that it was founded 30 years ago on this very principle.

Instead of focusing on developing the best software for individual PC’s, they built software for a world where PC’s would only exist in the workplace.  They got ahead of themselves, particularly when they got rid of the “Start” button.

Microsoft has just announced that they are reinstating this button, which is no coincidence.

As emphasized in this article, in retrospect it’s pretty easy to imagine where Microsoft should have gone

For example, reasonably priced smartphones loaded with Microsoft services (Facebook, Skype, Office, Xbox) for the emerging markets.  A simple and attractive product that would have enabled them to create a strong experience, structure the brand, and earn money to finance expansion into other markets.

To reinvent yourself, go back to basics

The human factor is obviously fundamental in any evolutionary process, as is the way teams are structured.

Digital requires resilient, creative people who are capable of reinventing themselves and can have several skill sets.  But companies and their policies are not structured along these lines.

This makes it difficult to take a step back and make the right choices, to understand how things now evolve and how digital generates a new mindset.

It is essential to go back to basics, to the foundation of the business, if one wants to understand its values – the real ones, not those described in an agency-penned brand book – and its usefulness or “sense of purpose”.

I am a firm believer in this philosophy.  Every time the surroundings move too quickly, referring back to this becomes crucial.

Analysing data can also be very useful in this context, because one finds oneself back in the consumer’s shoes.

I am not suggesting that one should limit oneself to operational agility, by which I mean doing what one knows how to do, but with new tools.  I’m talking about in-depth questioning on how to reinterpret one’s “sense of purpose” in a changing environment, using the company’s core values, of course.

gregfromparisAuteur: Grégory Pouy
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