strategy – CHRISTIAN SARKAR

February 20, 2014April 21, 2019

[Book Review] Big Bang Disruption: Strategy in the Age of Devastating Innovation

Here’s a new and important book that helps us make sense of the changing business landscape. It’s Big Bang Disruption: Strategy in the Age of Devastating Innovation by Larry Downes and Paul Nunes (from Accenture) – and it describes how so many businesses are disrupted overnight by big-bang innovations that come out of nowhere. The insights presented by the book add new perspectives to the work on disruptive innovation by Clayton Christensen and gang.

According to the authors, the big-bang disrupters may not even see you as competition. They’re not sizing up your product line and figuring out ways to offer slightly better price or performance with hopes of gaining a short-term advantage.

EXAMPLES OF BIG BANG INNOVATION

One of the examples is the GPS system. Do you even remember Garmin, or TomTom or Magellan? They were all disrupted by the smartphone – with Google Maps leading the way.

And the smartphone isn’t done yet. It has wiped out the wrist watch industry, threatens the digital camera market, the video camcorder market, and even the music and TV industries.

Other examples from the book include:

CampusBookRentals and Khan Academy in education, Pandora and Spotify in radio and recorded music, Skype and FaceTime in voice and video calling, and Square in mobile credit-card processing. These offerings’ lightning-fast adoption is a function of near-perfect market information. Wherever customers are, mobile devices let them search a wide range of specialized data sources–including online sites like Yelp, TripAdvisor, Amazon, and other free databases of user-generated reviews–to find the best price and quality and the next new thing.

What’s more, big-bang disruptions go far beyond information-based goods and services. Restaurants, for example, now depend on online reservations, customer-generated reviews, e-coupons, and location-based services to drive business.

THE SHARK-FIN PRODUCT ADOPTION CURVE

The traditional product development cycle has been radically compressed:

What this “shark-fin” curve means is that incumbents don’t have time to catch up. The crossing-the-chasm story is over. New products are perfected with a few trial users and then are embraced quickly by the vast majority of the market!

Here are some ways in which the world has changed:

TRUTH TELLERS

The book introduces us to the folks known as truth tellers. These are industry experts with
profound insights into new technologies and customer behaviors, who can predict
earlier than anyone else when small tremors signal imminent earthquakes. Often,
they are people who spend their careers working in the industry, and share a
unique passion for its mission, its products and its customers. My term for these guys is thought-leaders, or if you want to be real – they’re the ubernerds.

Truth tellers are often eccentric and
difficult to manage (no, really?!). They may be
found outside your organization–they may even be customers. Learning to find
them is hard. Learning to listen to them is even harder.

THE 12 RULES OF BIG BANG DISRUPTION

Another reason to buy this book is the neat methodology they’ve come up with to introduce this Big-Band Disruption mindset into your company:

I personally don’t think our Fortune 100 companies can adopt this sort of thinking very easily, so I’m looking for a lot of them to get dinged severely by the Big-Bang Disrupters, some of which will come to us from India and China.

Still, the framework they present is compelling – especially the part about leaving the market before you get disrupted in the end.

THE POWER OF ECOSYSTEMS

Finally, one of the key elements of Big Bang Disruption is the replacement of the traditional supply chain by dynamic, ever-shifting ecosystems. Again, the culture of most traditional institutions can’t embrace openness or collaboration. I’ve had some experience in that department.

Keep this in mind; I’ll be back very soon with a blog post on ecosystem strategy.

November 28, 2009

Bet You Can’t Eat Just One: Addiction as a Strategy

Listen to this:
Junk food elicits addictive behavior in rats similar to the behaviors of rats addicted to heroin, a new study finds. Pleasure centers in the brains of rats addicted to high-fat, high-calorie diets became less responsive as the binging wore on, making the rats consume more and more food. The results, presented October 20 at the Society for Neuroscience’s annual meeting, may help explain the changes in the brain that lead people to overeat.
So is this another example of addiction as a business strategy – similar to what the tobacco companies were doing earlier?
Maybe that’s why the IT geeks have such a hard time implementing Lean IT >>

October 15, 2009

Innovation in Turbulent Times: Two Heads are Better than One

In their article Innovation in Turbulent Times, Darrell Rigby, Kara Gruver, and James Allen make the case that the key to growth is pairing an analytic left-brain thinker with an imaginative right-brain partner:

Fine, but the problem is that in most “rational” industries – dominated by “maximize shareholder value” thinking, there no room at the top for the creative thinker. In fact, I would argue that most companies are too sharply skewed to the left brain. The CEO, CFO and the heads of all the business units are too focused on P&L to think outside the proverbial box.

They need to improve their “intuitive intelligence” by chatting with Francis Cholle >>

October 14, 2009

Misplaced Priorities: Six Strategies for CEO Failure?

American style management has been under some considerable stress these last few years. Now the nerds at Bain have some advice for the CEO. Apparently there are six dilemmas CEOs must face and – surprise! Bain has uncovered six strategies to help the CEO manage these dilemmas. Check out the cool diagram below:

I personally think the CEOs would be better off following VG’s 3 box strategy and executing on it. This other stuff is fine, but it doesn’t seem to be the stuff of great leadership. Nowhere do we see anything about creating great products or obsessing over your customers or sustainability. I bet Steve Jobs and Jeff Bezos do not manage their companies this way.

September 21, 2009

Will They Never Learn? Hyatt goes down the Circuit City Road to Brand Destruction

Stupidity is not learning from the mistakes of the past.

Now we see Hyatt Hotels destroying themselves in much the same way that Circuit City did before them.

What is it with these management decisions?

Paul Michelman describes the two-step process:

1. Make the decision to fire a very important yet modestly paid sector of your workforce. Fire the entire lot of them.
2. Outsource their positions to a third-party vendor who will bring in contractors to do their jobs at a lower cost. But — and this is critical — before you fire them, trick your workers into training the people who will replace them. How to pull this neat trick off? Tell them they are training vacation replacements. (Best to leave out the fact that the vacation is permanent).

Nice job.

A while back I had written about similar stupidity from Circuit City and the results of their brilliance. Same plot, same results.

How can a company compete when they turn their employees into disengaged zombies? This is an old management problem. Peter “The Great” Drucker believed that employees are assets and not liabilities. Too bad there are so many businesses that haven’t yet learned the cost of treating employees as costs.

And once again, I’m sure these executives are paid “well above the market-based salary range for their role.”

September 21, 2009

Healthcare for All: Obama Explains his Plan

What’s wrong with this? Nothing.

The insurance companies have spent over 375 million dollars blocking this with their Republican friends and their blue lap-dogs. At 300 million Americans, they could have given us each over one million dollars!

Here’s Matt Taibbi via Dr. Andrew Weil:

Heading into the health care debate, there was only ever one genuinely dangerous idea out there, and that was a single-payer system. Used by every single developed country outside the United States (with the partial exceptions of Holland and Switzerland, which offer limited and highly regulated private-insurance options), single-payer allows doctors and hospitals to bill and be reimbursed by a single government entity. In America, the system would eliminate private insurance, while allowing doctors to continue operating privately.

In the real world, nothing except a single-payer system makes any sense. There are currently more than 1,300 private insurers in this country, forcing doctors to fill out different forms and follow different reimbursement procedures for each and every one. This drowns medical facilities in idiotic paperwork and jacks up prices: Nearly a third of all health care costs in America are associated with wasteful administration. Fully $350 billion a year could be saved on paperwork alone if the U.S. went to a single-payer system – more than enough to pay for the whole goddamned thing, if anyone had the balls to stand up and say so.

The time is now, America: Healthcare for all.