customer's dilemma

Vinay kamat

Can innovation sell? In the dotcom era, the idea was christened the next big thing and oversold. It explained the power of the idea but failed to explain the boring part: how to move things from Points A to Z. While A represented imagination, Z was all about execution. When dotcoms went bust, innovation became suspect.

What was once a motivation tool for generals, and an intrinsic part of their strategic vocabulary, became a worn-out cliché nobody was prepared to buy. Innovation had not only become a generic word, it was no longer fashionable.

How stale is innovation? We may have to come up with some other expression for breakthrough transformation, says Vijay Govindarajan, author of 10 Rules For Strategic Innovation. Sometimes it can be entrepreneurial and out of the box—
just like the last 15 minutes in Tamil films.

Typically, as Govindarajan points out, this is the most exciting part of the film. The heroine gets kidnapped in a Merc by the villains. But her rescuer, the hero, uses a horse to outrun the powerful car. He rides down the hill, across fields, and through other hurdles, to win the day. “If that isn’t an innovative solution, what is?”

The horse versus Merc anecdote describes the odds that innovators have to battle against, which is amply visible in India’s entrepreneurial success. But without the choreography of execution, innovation can’t budge, let alone gallop.

In his well-researched book, Govindarajan details what comes between an idea and execution. Tomorrow’s businesses must forget, borrow, and learn. They must forget, or discard, templates that create success for the parent; they must borrow best practices and assets from the parent; and they must learn to create their own templates of success, improving with every step.

It’s really the last step that drives innovation in the organization. But for all his emphasis on execution, Govindarajan is a firm believer in the revitalizing role of innovation. An organization that creates a startup culture within, by taking the forget-borrow-learn path, prolongs its life. “And I’m all for increasing the longevity of organizations. The loss of an organization is the loss of knowledge, talent, and jobs. It’s huge.”

Of course, there are cases where independent startups have sounded the death-knell for organizations. Take Google which did not have any parent to inspire or bankroll it. Or Yahoo, which created a crowd of followers with its content aggregation model. Does the future then lie outside the organization, where upstarts like Google keep prowling and scoring hits?

It all depends on a firm’s ability to sense the birth of a new market. It hinges on the speed at which it breaks the tyranny of customer satisfaction. After all, customer satisfaction is the emotional connect with the loyal customer. Firms that keep satisfying her ought to win. But what if the loyal customer is not a savvy customer? What if she is not able to sense change and demand tomorrow’s products from the firm?

Such customers can disrupt a well-established player, as Clayton Christensen documents so well in The Innovators’ Dilemma. For organizations venturing into the digital era, it’s really a question of what, and how many, customers to forget.
It also depends on whether innovation is bred within the organization, on its periphery, or outside, in a skunk works.

Until that is decided, least expected competitors like Google and eBay will challenge the organization. And hasten its demise.

business of paranoids

The 1990s were the best years of management. Re-engineering, Six Sigma, Core Competence, the Customerised Corporation, Mass Customisation, and a host of other ideas dominated the era. Michael Porter, C K Prahalad, Gary Hamel, Michael Hammer, Jack Welch, Tom Peters, among others, defined the rules of contest.

Despite the proliferation of ideas, one unusual writer-he was a practitioner like Welch-stood out. The odd guy: Intel’s Andy Grove.His book was a guide to deal with inflection points: dramatic changes in the rules of business. Inflection points could vapourise companies. What caught the fancy of the management world was the book’s title: Only The Paranoid Survive.

If the purpose of companies was happiness — customer happiness, that is — companies had to reflect that mood inside as well. How could paranoid workers create delighted customers?Well, Grove wasn’t just defining the aggressive mood of the 1990s-a decade where IBM was being pushed into the pit, Microsoft was acquiring pole position, and Intel was overtaking, or reinventing, itself. He was talking about the future, where upstarts could hobble giants.

To understand ‘paranoia’, just look at Google and Sony. One has changed the rules of competition; the other, once a byword for innovation, is playing catch-up.Grove, Intel’s then CEO, was forthright and intuitive even as he was explaining his book’s unusual title: “Business success contains the seeds of its own destruction.The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left… the prime responsibility of a manager is to guard constantly against other people’s attacks and to inculcate this guardian attitude in the people under his or her management.”

Grove’s title has resonance even today. For, paranoia has two aspects. First, never tire of watching competition. Second, paranoia leads to innovation.Steve Bennett, CEO of accounting software major Intuit, gave an idea of the first aspect when he told USA Today recently: “It’s better to be paranoid and focus on doing everything you can to eat someone else’s lunch rather than being the person who gets their lunch eaten.”

Ravi Kant, managing director of Tata Motors, dwelt recently on paranoia’s second aspect at the Mumbai launch of strategy guru Vijay Govindarajan’s book, Ten Rules for Strategic Innovators. Great organisations, he said, require a crisis to think anew. He was talking about the Rs 500 crore loss his company incurred a few years ago and how it jumped back into the black by improving processes and creating new local and global markets.A crisis helped the organisation to reinvent itself.

So, as Kant put it, organisations (do) need to create a sense of crisis to manage the future better. In a sense, he was echoing the message of paranoia. As Grove wrote in 1996: “Most companies don’t die because they are wrong; most die because they don’t commit themselves.”Indeed, it wouldn’t be wrong today to say “only the paranoid win.”

For, paranoia is a state of mind that senses change and welcomes it. It makes innovation possible by focusing the mind.

real madrid and content

Vinay Kamat

Is Real Madrid a content company? The answer to that question provides a glimpse of the economy that we live in, where content drives digital strategy. Not surprisingly, Microsoft, Apple, Intel, Google, Yahoo and a host of other digital players are moving towards a single destination: the living room.

What they seek to do is simple: create mother platforms that manage content flows from all electronic devices and delivery channels. Such a platform will be the nucleus of the digital home’s content ecosystem, which includes TVs, PCs, gaming consoles, sound boxes, PDAs, digital cameras, and other electronic devices.

The big challenge is not technology, nor technology platforms, but content architecture. Already, technology has moved beyond our expectation. Take Microsoft’s Xbox, for instance. Its high-powered CPU, HD gaming display, and superior graphics make the console a pocket-rocket. Look at content delivery channels which are becoming smarter, quicker, and smoother. Yes, broadband is becoming broader and faster.

With technology setting a scorching pace, companies are now focusing on content architecture. Here’s Kodak CEO Antonio Perez’s take on the future, which he mapped at the International Consumer Electronics Show in Las Vegas last week: “Consumers own the future of digital imaging—their pictures, their memories, their life’s data, the stories they can tell about their life. But it’s no longer about just pictures or voice, data or text. It’s the future where information and imaging become one, and consumers can access the important images of their life anytime, anywhere.”

What Perez is talking about is content architecture. It’s an area that is still evolving because nobody is sure how content will be consumed or who will be tomorrow’s content king? Will it be PlayStation, iPod, Google or Windows?

iPod may have been a breakthrough but it’s really iTunes—the business model that made music downloads possible—that is Apple’s biggest idea. It made a music revolution possible by pulling music labels into the digital era. It built a novel content architecture: music on tap.

In the Entertainment Economy, author Michael Wolf describes a similar transformation: “As retail stores began to reproduce the look and feel of theme parks, it became clear to me that the line between entertainment and the rest of the economy had disappeared.”

In the new internet era, the line between technology and content is disappearing too, with technology companies seeking bits, instead of chips, to rethink their strategy.

So, if Google can be labeled a content company, why can’t Real Madrid or BCCI (Board of Cricket Control for India)? As the football club’s corporate managing director, Carlos Martinez de Albornoz, describes it, in Financial Times: “We structured ourselves as a company and began to think of ourselves as content providers. This was an authentic revolution.”

The content kickoff in today’s web championship is an authentic revolution too. It will decide whether tomorrow’s economy will be an entertainment economy, an experience economy, a search economy, or an economy of pods.

middlescence

vinay kamat

At the height of corporate structuring in the mid-nineties in India, one HR species was grabbing all attention: the middle manager. Caught between a demanding top management and a restless entry level, middle management was being squeezed into irrelevance. Between the ages 45 and 55, middle managers could either reinvent themselves or get marginalized.

Those days CEOs would harp on downsizing, short-sizing, and smart-sizing. But what they were all really talking about was the middle manager. HR departments were busy drawing up retraining and retooling modules to help middle managers morph into hybrid men, with multiple skills and more KRAs.

Nothing could explain the phenomenon better than an obscure word just waiting to be put into circulation: middlescence. A combination of ‘middle’ and ‘obsolescence,’ it was intelligently coined by some management writers. It symbolized the fat, multi-layered, organisation.

Often, it was left to the organization to yank a manger out of obsolescence brought about by newer technologies, changing work ethic, and high-powered growth. At a big multinational that I visited in November 1996, for instance, a middle manager had just moved out of his shop-floor function which was getting redundant. Top management had offered him another job: canteen management.

Even though he initially lacked the skills in canteen management, the manager was able to learn them fast enough to bag two consecutive ‘best industrial canteen’ awards. His approach of learning everything fast was an antidote to middlescence.

During the first internet wave, which lasted in India until end-2000, middlescence reflected the agony of the analog generation: it was caught right in the middle. But since then, the middle has started aggressively reshaping and recalibrating itself to cope in an era where email, Google, PDAs, and PowerPoints have become workplace fixtures.

Even as middlescence has been reinterpreted by the brave middle manager, it has had an impact on life as well. Wordspy.com, which showcases newly-coined words, defines it as the turbulent, rebellious middle age of the baby-boom generation. Talking about middlescence, America’s retirement guru Ken Dychtwald told BusinessWeek Online that the period 50-70 in one’s life represents the search for a new identity. As he summed up: “It’s not the end of life but really just the third quarter.”

If you broaden the definition of middlescence, you will realize that it affects all of us at all ages. It is a strange urge to do something different in your career or life, which could provide the one thing we miss: satisfaction.

The picture of middlescence is incomplete without Po Bronson’s fascinating account of people who have been courageous enough to chart their own lives or careers: What Should I Do With My Life? In his introduction to the book, Bronson describes his literary journey: “Looking for guidance and courage…I became intrigued by people who had unearthed their true calling, or at least those who were willing to try. Those who fought with the seduction of money, intensity, and novelty, but overcame their allure. Those who broke away from the chorus to learn the sound of their own voice.”

Now, Bronson expands the theme further in a riveting account of families: Why Do I Love These People? Even as it explains the idea of the family through real-life, moving, experiences, it shows what makes people different.

Middlescence is not just about careers or middle managers. Its answers don’t lie in management or psychology books. It’s an idea that opens a whole Pandora’s Box of life’s intricate issues. Like the newly-appointed canteen manager, it’s about trying. It’s about willingness. And it’s more than a job.

Indeed, it’s an interesting time of your life when you ask: What next?