Brilliant reflections on skunkworks
Ah, skunkworks. Those small, agile units beloved of large organizations looking for the Next New Idea. I've written about them in the past - and outlined some of the pitfalls of setting them up and expecting great things to happen without having some way of re-integrating them back to the core business.
I ran across this really interesting blog post this morning that adds a lot of rich texture to the subject of skunkworks and pulls together some really interesting examples. For instance, I didn't know that the originator of "let a thousand flowers bloom" idea was Chairman Mao! Definitely worth a look.
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- Posted Rita McGrath on July 31, 2010
Eroding advantage at Motorola
My colleague Alex van Putten was kind enough to forward along this interesting image from a report written by the Silicon Alley Insider. It visually depicts the fast erosion of Motorola's competitiveness in the phone market, with Apple outselling it by number of phones for the second quarter in a row. The article makes interesting reading as well.
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- Posted Rita McGrath on July 30, 2010
Uncertainty and risk in discovery driven planning
I was recently fortunate enough to be teaching in a very interesting program for strategy consultants at IBM. One of their senior leaders, an ex-BCG guy, pointed out to me that I really could use a picture to communicate the value of Discovery Driven Growth. Here, therefore is his suggestion! What it basically shows you is how uncertainty is brought down simultaneously with investment increasing so that you tie the level of investment you are making to the level of uncertainty you face. Pretty interesting idea.
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- Posted Rita McGrath on July 24, 2010
Idea generation is seldom the problem
So, you've decided that its time to get out from under that black cloud your business has been in for the last two years and start thinking about growth again. If you're a senior leader or CEO, what do you do next? If you're like many, you'll gather together a group of important people in your organization and start brainstorming about new growth opportunities for your company, hoping that the great ideas coming out of the session will catapult your organization to a new growth trajectory.
Hmmm. Not so fast. For starters, most companies don't lack for good ideas - just ask a randomly selected group of employees and you'll be flooded with suggestions for how the business could be improved. The dilemma is that many of these are not going to be breakthrough concepts. To get those, you really need some kind of framework, like the lenses approach we take in MarketBusters or some other structured way to stimulate your thinking. Blank sheets of paper are terrifying! Secondly, most senior leaders (with all due apologies) are quite removed from the customer experiences and therefore can come up with stuff that looks good on paper but may not work at all in real life. Have a look at any series of senior-level decisions to do new things (often with acquisitions) and you'll see what I mean (Bebo, anyone?).
What senior leaders can do instead is to foster the development of an innovation and growth system in the organization that can take the ideas that are floating around, scale the best of them and commit a convincing set of resources to them so that they actually have a chance to succeed in the marketplace. The problems senior folks need to address are often legion: silos, poor resource allocation processes, risk-aversion, negative handling of failures and disappointments, sclerotic budgeting systems, slow decision-making...if you're going to get them focused on growth, those are the things that need to be addressed.
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- Posted Rita McGrath on July 24, 2010
While we’re on the subject of wrong ends of competitive waves…
It must be my week for seeing bad news in many places. I just love reading Scott Anthony's blog over at the HBR web site, where I also am a regular blogger. Scott is part of Innosight, a terrific consulting firm which helps companies figure out how to address some of the more characteristic problems that can get in the way of their capacity to grow. He recently talked about a phenomenon which a number of us have written about, the Innovator's Paradox. While he used Microsoft as a case in point, it applies to many situations, in which phenomenal success can put in place all the wrong incentives if your ambition is growth.
When a company is really successful, it's hard to make investments in new initiatives that attract meaningful attention or that are appropriately resourced. By the time a company really needs those growth opportunities, it is often too late and too constrained to go after them with conviction. The result is often that the mighty fall pretty hard, even amidst some of the best cash flows of their corporate lives. Consider Motorola, on the bring of being broken apart. Or IBM with a near-death experience that very nearly did it in. Or Kodak - sigh...
So what do you do about this? I think it's really important to have an innovation system that recognizes the challenges and puts in place mechanisms to address them, early. So separate units which are kept small and hungry and which aren't swamped by the mother ship, resources that are not trapped in the existing business, people who feel they can build a career doing something new and different kinds of political leadership that don't let success go to their heads -- all valuable when things seem just too good for too long.
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- Posted Rita McGrath on July 15, 2010
