Economist Article

Carlo,

I read that economist article, and it was very good.

http://tinyurl.com/22ph8j

Now you will notice that these companies
get into trouble when they mix up the roles as I lay out in my book: conservator adn
innovator.

The end of the article mentions Peter Drucker, from whom I took the idea of innovator vs.
conservator (he gave me the book himself)... Drucker argues big biz sdhould innovate, and
that struck me as wrong... and one reason I wrote the book you have is to lay out the
disagreement... (not that drucker or anyone could care less what i have to say...)

But it is intersting if they viewed their problems through the lens I lay out, then they would
sort out the problems.

The first problem is what they measure is the result of hawthorne effect, not Six Sigma or
TQM. They should read FOOLED BY RANDOMNESS by Nassim Nicholas Taleb.

Next, yes, innovation costs too much if done by huge-overhead companies... they ought
leave it to tiny overhead innovators... althugh Google may not be clear as to the "how" of
their innovation, it is clear to me: they focus on the customer ( user experience )...

"Fast failing" is what innovators do, pressing the customer directly and running the rabbit
into the ground, or designing what would sell...

Those companies that experience turf battles could sort it all out by simply demanding the
factions "prove it with customers..." But again, i disagree with conservators innovating at all,
their role is to lower the cost and widen the access of the innovative item...

The Siren song section of the article is best, becasue the confusion is most knotted there...

Yes, pleasing only your best customers causes the problem of the narrow basis of
comparison... you need to please most customers...

Yes cost of innovation is high for conservators, but not innovators...

It is innovators who should be coming up with new for those cream customers and charging a
premium price, not conservators coming up with the new for cream customers and charging
cheap price... there is the rub we at small business know about, and they have not figured out
completely yet... they keep buying innovators or stealing their ideas, which is the proper way
they should acquire items upon which to lower the cost and widen the access...

I love Christensen's comment that this error (he and I agree it is an error, I see a different
solution) on the part of big biz "allows upstarts to enter the market and offer inferior,
although perfectly adequate. technologies and products at much lower prices, and push
incumbents into ever small niches..."

Well yes and no, again. Innvators " enter the market and offer inferior, although perfectly
adequate. technologies and products" but not at lower prices. They do so at higher prices.
the key that is missing for Christensen is in retrospect those products are inferior, but in
1980 a cellphone was highly desirable and plenty of people, paid the super premium prices
to people like Seattle boy Craig McCaw for cell phones and service that was few choices,
lousy product, expensive and slow to get. today cell phones are more better cheaper faster
becasue the conservators are heavily into it... McCaw Cellular sold out to AT&T, making
McCaw a billionaire, and AT&T made every american feel like a million bucks with their cheap
phones and connections to the cell phone network....

Christensen is clear on the new if not so good (again compared to what evolves and
eventually gets to the mass consumer)... he mentions transistor radios which where rather
bad in the early 1960's. comparatively speaking, with their tinny sound.

Barry Gordy, head of Motown music, used to have his artists songs arranged for teh best
sound that could come out of transistor radios and car radios... what instruments best sound
on those devices... talk about passion for your product! (Also, hence why all the "digitally
remastered albums from original tapes, etc...)

So thanks for the article and let me know when you finish the book.

John

Bookmark this post --- Email this post