This blog expands on some of the themes of Winners and Losers. The guide on the right allows you to look at these thematically under headings like business strategy or networked economy.
I stopped writing the blog in 2011 when I started work on a new project examining the dynamics of change.
18 January 2011
Robert Lane Greene has written a sparkling account in Intelligent Life of the growing rivalry between Google and Apple. For years Steve Jobs was an inspiration to Larry Page and Sergey Brin, and, Eric Schmidt sat amicably on Apple’s board until 2009. As Greene puts it, ‘the companies could have been a match made in heaven: Apple’s gorgeous devices running Google’s miraculous services.’ But when Google launched Android and challenged the iPhone in the glittering smartphone market , they became serious rivals and now compete on several fronts: operating systems, browsers, email, photos, app stores, cloud computing, even books and music. (Though not exactly ferociously.)
Greene is particularly good on what he calls the clash of cultures. The key to understanding Steve Jobs, he suggests, is that calligraphy was the most important course he took in his brief time at college. Design is Apple’s supreme value and Jobs has always been a perfectionist, obsessed with getting every tiny detail exactly right. His colleagues used to moan about his reality distortion field. Now that he’s a god, they simply venerate him. Google on the other hand is a ‘herky-jerky place’, where engineers experiment endlessly, happy to put out beta products that often fail. According to Eric Schmidt, ‘the Apple view is coherently closed. Ours is the inverse model: the web, openness, all the choices, all the voices.’
Continue reading Apple v Google, not quite a death match
31 December 2010
In my last post I sang the praises of Daniel Pink’s book Drive. If anyone needs any convincing that the Type X approach to managing professionals is counter-productive, they should look at how demotivated so many teachers in Britain have become as a result of top-down targets from politicians, inane box-ticking and morale-destroying inspections by Soviet-style Ofsted officials.
But I do wonder how universally applicable are the Type I (for intrinsic) principles that Pink and the ‘positive psychologists’ regard as fundamental. Autonomy, common purpose and something more than mere competence are clearly crucial for those doing highly skilled, problem-solving, creative and professional work. But even then the scope for attaining anything like real mastery is limited by the fact that most businesses and the people who work in them have more pressing priorities. The most successful firms will generally be those where everyone is encouraged to take pride in doing good work, but only a tiny number really aspire to or have the chance to pursue mastery.
Continue reading Who are the masters now?
7 December 2010
Some books change your view of the world, not so much because they tell you something completely new, as crystallise ideas you half-understood already. Or as Proust put it, you see the world with new eyes. Daniel Pink’s Drive is such a book. Anyone who cares about work – how it can be a source of enormous satisfaction, but more often is a dreary necessity or worse – should read it.
At first I thought it was merely a re-working of ideas I’d discovered, but half-forgotten, decades ago – Douglas McGregor’s Theories X and Y, Abraham Maslow’s self-actualisation at the top of his hierarchy of needs, and Mihaly Csikszentmihalyi’s wonderful Flow. Then I realised that Drive was much more than this, a new synthesis that takes account of these seminal concepts (of which most managers are still wilfully ignorant) and more recent research that greatly amplifies them. McGregor and his contemporaries showed what was wrong with carrot and stick approaches to motivation. More recent psychologists like Csikszentmihalyi have concentrated on what it takes for people to be highly motivated. How easy it is for these conditions to be achieved is open to question, but this is the most compelling overall account I have come across. Continue reading What drives us to work
21 August 2010 (Part 2 of post of 17 August)
The French Revolution was another striking example of history moving like a runaway train. The monarchy had been in dire financial and moral straits for almost a century, since Louis XIV’s grandiloquent expenditure on follies like Versailles and his disastrous wars. Subsequent wars led to more humiliating defeats at the hands of the hated British, the loss of Canada and ever-mounting debts. Helping the American rebels defy the British crown brought brief satisfaction, but took France to the verge of bankruptcy and inspired patriotic aristocrats like Lafayette to dream of liberty for France. Brilliant writers like Voltaire and Montesquieu catalogued the many failings of an absolute monarchy that was both incompetent and unjust.
By 1786, interest payments on debts consumed half of the crown’s income and no more could be borrowed. Radical reform was clearly necessary, but without constitutional change the elite refused to cooperate. In 1788 Louis XVI finally agreed to summon the closest thing France had to a representative assembly, the long defunct Estates General. His suggestion that each part of France should draw up lists of their grievances generated a mountain of paper. In the months leading up to May 1789, when the Estates finally met, expectations and excitement rose to fever-pitch. The King’s failure to treat members of the Third Estate (commoners) with respect dashed almost everybody’s hopes. Nobody wanted to replace the monarchy, merely to reform it, but events spiralled out of control and Louis had no idea what to do.
Continue reading More runaway trains
17 August 2010
Part of my long summer break was spent writing a new talk, Winner Takes All , and thinking further about the role feedback loops and network effects played in the rapid rises of Microsoft and Google to market domination. For relaxation, and entirely by chance, I read Malcolm Gladwell’s Outliers and Ian Kershaw’s biography of Hitler. This unlikely assortment of topics set me thinking about the part that feedback loops play whenever things change suddenly. Yet most of us are only dimly aware of them: neither Gladwell nor Kershaw mention them explicitly, yet they both show brilliantly how they work.
Gladwell’s thesis is that people who become outstandingly successful do so because of the interaction of many social factors, notably when and where they are born, and through achieving mastery of their core skills by repeated practice. Great composers, from Mozart to Lennon and McCartney, got to be so accomplished, not because of innate genius but because they spent enormous amounts of time in their youth practising their art, something like 10,000 hours each. Exactly the same pattern can be seen in the formation of computing prodigies like Bill Joy and Bill Gates, who had exceptional opportunities as teenagers to spend hours every day, programming obsessively.
Continue reading Hitler, History and feedback loops
28 June 2010
In my last post I discussed five fundamental questions every business entering a new market needs to consider. In this one we consider the other five:
6. Does our value proposition give customers a compelling reason to choose us repeatedly?
7. How will we achieve an organisational culture that combines entrepreneurial spirit and management discipline?
8. Who are/could be our most formidable competitors and how do we measure up?
9. What’s special about us? How will the firm differentiate itself?
10. How coherent and realistic is our strategy?
I ended last week with the challenge of winning the first customers, which leads directly to the next question: does our value proposition give customers a compelling reason to choose us, and to do so repeatedly. Webvan’s didn’t; Ryanair’s does. It’s not a delightful experience, but it’s cheap and reliable, so even though passengers moan about it, they keep coming back. That’s the acid test – coming back. We only have a business if they come back again and again. There has to be a reason, but a surprising number of businesses would be hard put to spell out what theirs is.
Continue reading Five more questions for market entrants
June 23 2010
In Winners and Losers I aim to describe and explain, not to prescribe or predict. The success factors I identified for organisations that create new markets and establish lasting industry leadership certainly contain lessons for any business, but they’re mostly implicit. In my workshops for business audiences, I suggest ten any business entering a new market needs to consider before it makes too heavy a commitment to a new venture. Most are deceptively simple, which may explain why they’re so often overlooked – with fatal consequences.
None of the winners described in Winners and Losers had clear answers to most of them at the outset – they discovered them as they went along. But for them the market was tabula rasa; for new entrants, it will be at least starting to take shape. Entrepreneurs shouldn’t spend too much time on analysis, but every now and then, entrepreneurs need to ask themselves some fairly fundamental questions.
Continue reading Questions for market entrants
25 May 2010
Jason Fried and David Heinemeier Hansson, the authors of Rework, are right to call it ‘a different kind of business book for a different kind of reader’. With their passion for doing a few things really well it has some of the qualities of that enduring classic, Zen and the Art of Motorcycle Maintenance. Fried and Hansson are resolutely practical and pragmatic, but this is also a work of philosophy that challenges most of the conventional wisdom about measuring business success primarily in financial terms.
For them business is not about ambitious business plans, getting big fast and exit strategies, but doing good work you care about, being different, and frugal. Their own software company, 37 Signals, founded in 1999, is successful despite still only having 16 employees. Rework is basically a set of maxims for doing likewise, and they make it clear that they are not starry-eyed idealists – ‘a business without a path to profit is just a hobby.’ The vast majority of small businesses have only the tiniest chance of becoming a giant corporation and very few aim to do so. This is pretty much the path I decided to follow myself when I turned my back on corporate life and became an independent management consultant.
Continue reading Zen and the small business