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Know Your ABC’s

History is full of business that are, as Jim Collins would put it, ‘Great’ companies but that very success becomes their undoing. Apple, IBM, Microsoft – all companies who missed massive opportunities by believing in their own hype. They were in fact organised to ‘fight the last war’ instead of preparing for the future. I have harboured some thoughts about whether Google and Facebook would in time also fall to this issue, what we call ‘The Chessboard Mentality’ or the belief that one competes on a set, defined ‘board’ of competition – with pieces that can only be moved in certain ways.

This chess board mental image is usually created through success and then in itself leads to failure.

Just ask any traditional media companies, from movie makers to newspapers to the music industry. The new wave of Web 2.0 companies that appeared post-bubble have transformed much of the media industry and beyond. Digg, Yelp, Facebook, Twitter, YouTube, Napster – each put a nail in the coffin of several industries. And the new wave of companies continues. Of course, history repeats itself. These new companies don’t compete the way the traditional companies are used to; they are relatively small, flexible and nimble compared to the old world. Similar to the modern military trying to deal with insurgents or what military planners call ‘asymmetric warfare.’ What we have now is what we are terming Asymmetric Business Competition (ABC) instead. Competing with traditional means won’t defeat this competition.

A posting on the TechCrunch newsletter last Friday included an analysis by an author who was at an informal dinner with investors in California, all of whom harboured doubts about Google’s long-term future. The main reasons? A lack of a coherent strategy, a brain-drain of their innovative people and an adherence to an engineer-only innovation model. Will mighty Google fall into the same trap as Microsoft and others, and lack the vision to create new extensive revenue generating capabilities apart from its original, core business?

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  1. July 20, 2010 at 11:41

    I concur with the writers comments about “Chess board mentality”. Large corporations particularly can be a victim of their own success. Provided the processes for business growth and development are continuosly challenged by entrepreneurial thinking (intrapreneurship) in the workplace there is a chance for innovation. It should also. however, be supported by outside providers who can offer a different (and hopefully independent) perspective. Jeff Immelt, CEO for General Electric brings in outside players as well as instigating a process of internal approval for an entrepreneurial and innovative mindset.

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