Dilbert Simplifies The Mystique of Innovation and Management Hyperbole - Jim Woods

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How Not To Suffer The Fate of RIM Blackberry. A Lesson in Commoditization and Longevity

 

 

They have volumes in common with you.

It shouldn’t come to much surprise that the embattled Research In Motion, makers of Blackberry, will become that next failed company. Despite occasional resuscitation from loyal fans, reminiscent of Saab’s recent fiascos which lasted years too long, RIM created a niche only to fall prey to the enemy of the great: Commoditization. RIM’s stock is down ytd at this writing by a mind numbing 70%. This didn’t need to happen. 

RIM was “The” smartphone company until a competitor named Apple out innovated and out competed their own product. How did Apple deftly spring past RIM? Surprisingly with ease. RIM forgot they would have competition. Most would presume that RIM with its well priced iconic product Blackberry would assuredly not be affected by commoditization in which a product becomes indistinguishable from its competitors. You would be wrong. What is happening with RIM is probably occurring in your company. 

The road to ubiquity is laced with land mines.  At a time when business moves at the speed of thought RIM responded to business demands traditionally slow if at all. RIM was slow to advance from its core market of B2B to B2C which was fast becoming tepid and then continually released poorly designed products. Flanked by a perpetual assault by competitors i.e. proliferators on price and innovation such as Google android and Apple with their “rope a dope” techniques, RIM continued to over promise and under perform.

I find three reasons why RIM has failed. 

1. Deterioration – When low end competitors move in with low-cost, low benefit drawing the mass market.
2. Proliferation – When competitors develop new combinations of price and unique benefits attacking an existing market.
3. Escalation - When competitors squeeze profits by offering more benefits at the same or lower price.

If you were RIM’s CEO or Board person you would find they have faced two out of three of the challenges. Deterioration and proliferation.

 Now, RIM is undermined by a reputation of poor quality, lack of innovation an inadequate customer service.   

Earlier this year at RIM's Capital Market Day Mike Lazaridis founder and Co-CEO of RIM announced he was presenting on RIM’s Playbook. He discussed the features but little to nothing on differentiation. 

In Jonathan Geller’s the "Boy Genius” he writes: 

“Picture yourself sitting in an executive briefing at Research In Motion. You’d hear Mike Lazaridis unequivocally state time and time again that BlackBerry smartphones would never have MP3 players or cameras in them because it just does not make sense when the company’s primary customers were the government and enterprise. “BlackBerry smartphones will never have cameras because the No. 1 customer of ours is the U.S. government,” Mike Lazaridis would say in meetings. “There will never be a BlackBerry with an MP3 player or camera.” 

What does Mr. Jobs do? 

He strutted the iPhone which eschewed the design of then top players RIM’s BlackBerry and Palm’s Treo line. Avoiding groupthink, Apple and Jobs dropped the keyboard, and replaced the stylus with the finger and multitouch. RIM? 

Continues Geller: "When you hear Mike (RIM CEO) talk about the latest and greatest, it's been the same thing for ten years: security, battery performance, and network performance. RIM has positioned battery life and network performance for years. People are not concerned with iPhone batter life," one source told me. Network performance to Mike trumps any innovation a device like iPhone offers. Mike is convinced people won't buy an iPhone because battery life isn't as good as a BlackBerry."

This is a textbook example of deterioration. The outcome is predictable.

In today’s business environment there are new rules of war: 

• Speed
• Agility
• Adaptability
• Innovation
• Fierce competitive resolve.

This is the new world of business competition at the speed of thought. The old days are the old days. RIM's leadership looks grim. They are models of security conscious businesses for sure. A feeling of victory is understandable. But not where investors are lukewarm with growth prospects and more erstwhile competitors are nipping frantically at the flanks.   

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Co-Creation and the 12 Different Ways for Companies to Innovate

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Here is an excerpt:

..what exactly is innovation? Although the subject has risen to the top of the CEO agenda, many companies have a mistakenly narrow view of it. They might see innovation only as synonymous with new product development or traditional R&D. But such myopia can lead to the systematic erosion of competitive advantage, resulting in firms within an industry looking more similar to each other over time. Best practices get copied, encouraged by benchmarking. Consequently, companies within an industry tend to pursue the same customers with similar offerings, using undifferentiated capabilities and processes. And they tend to innovate along the same dimensions. In technology-based industries, for example, most firms focus on product R&D. In the chemical or oil and gas industries, the emphasis is on process innovations. And consumer-packaged goods manufacturers tend to concentrate on branding and distribution. But if all firms in an industry are seeking opportunities in the same places, they tend to come up with the same innovations. Thus, viewing innovation too narrowly blinds companies to opportunities and leaves them vulnerable to competitors with broader perspectives.

 

How to think differently

Mohan and his co-authors then continue to explain how companies can avoid innovation myopia...

We propose anchoring the discussion on the customer outcomes that result from innovation, and we suggest that managers think holistically in terms of all possible dimensions through which their organisations can innovate. Accordingly, we define innovation as the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system.

The authors define twelve such innovation dimensions in total. These are: Brand, Networking, Presence ("where"), Supply Chain, Organisation, Processes ("how"), Value Capture, Customer Experience, Customers ("who"), Solutions, Platforms and Offerings ("what"), They then continue...

Traditionally, most firms’ innovation strategies are the result of simple inertia or industry convention. But when a company identifies and pursues neglected innovation dimensions, it can change the basis of competition and leave other firms at a distinct disadvantage because each dimension requires a different set of capabilities.

Co-Creation and new theory of Disruptive Innovation

I am particularly interested in how certain of these innovation dimensions are now more capable of disrupting incumbent firms than others. For example, I had a chat with Karl Long about how co-creating firms have the potential to disrupt existing markets in new ways (Clayton Christensen in The Innovators Solution writes only about how simpler, cheaper, more convenient products and technologies can disrupt existing markets). So for example, using the article's dimensions – co-creating firms should seek to innovate along a co-ordinated combination of Brand (Engagement), (Social / Community) Network and Customer Experience (Design / Elements) dimensions. Importantly, to be a successful co-creating open business, it is not enough to excel in one alone but all three simultaneously.

Original Post: http://chrislawer.blogs.com/chris_lawer/2006/06/cocreation_and_.html

via futurelab.net

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Jim Woods is president and founder of InnoThink Group. A leading consulting firm specialized solely in enabling organizations of all sizes in all industries develop top line growth through strategic innovation and hypercompetition. Jim has over 25 years consulting experience in working with small, mid size and Fortune 1000 companies. He is a former U.S. Navy Seabee and grandfather of five. For availability email or call us at 719-649-4118. Subscribe to our innovation and hypercompetition newsletter.   

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