September 30, 2005

Sustaining v. Disruptive Innovation

The principal idea to absorb here is that as incumbent technologies begin to over-serve customers' requirements, disruptive technologies often begin to address customers' lowest requirements.

In general, the challenge for managers of incumbent technologies is to have the courage and authority (and the cash) to enter markets and build new value networks to participate in the different markets around disruptive technologies, to be there when the disruptive technologies become mainstream.

Christensen studied the disk drive markets because of the speed of innovation there, but this graph describes the adoption experience of as many disruptive innovations as you can recall:

- the Gutenberg printing press
- electric light
- fuel-injection
- Be Bop
- the racial integration of Major League Baseball
- television
- the Fender Telecaster
- jet aviation
- recreational use of cannabis sativa
- Compact Disc
- iPod
- OpenDocument

September 29, 2005

No Direction Provides a Compass

There's a new documentary about Bob Dylan, No Direction Home, running right now on PBS (in the US). Even if you -- like me -- find Dylan to sound like nails on a chalkboard, see this film: he is one of the premier artists of our time and the film gives new insight – recent, lucid, interviews of Dylan himself – about his musical and cultural influences between his late-1950's start and 1966.

The film was put together by Jeff Rosen (Grey Water Park), Nigel Sinclair (Spitfire), Anthony Wall (BBC) and Susan Lacy (Thirteen/WNET New York); Martin Scorcese merely helps it along. Notably it includes unseen footage from the DA Pennebaker film archives of Dylan performing live in Belfast, Dublin and Newcastle.

Cognoscenti know the immortal Pennebaker/Hegedus documentary catalog -- the rest simply don't remember that Jimi Hendrix lighting his guitar on fire is a Pennebaker image. Some highlights include:

“Daybreak Express” (Duke Ellington, 1953)

“Don't Look Back” (Bob Dylan tours England, 1966)

“Monterey Pop”
(Jimi Hendrix, The Who, et al., June 1967)

“Ziggy Stardust and the Spiders from Mars” (David Bowie's last Ziggy apperaance, 1973)


“Depeche Mode 101” (1989)

“The War Room” (Clinton, Stephanopoulos, Carville, 1993)

"" (2001)

“Only the Strong Survive” (Soul Greats Club Dates, 2002)

No Direction Home answers the perennially myth-muddy questions for new generations, “Where on Earth did Bob Dylan come from; and why does music sound like it does?”

Google is to Microsoft...

Google is to Microsoft as SOA is to Client-Server.

Google is adding about 100 new employees a week and Microsoft is reorganizing its business to stop the departure of talent. What image is more indicative of the end of an era (and the beginning of a new one) than this?

Among other things, Google represents the first and clearest example of the success of Professional Open Source, of software-as-service. Its success should stand in our minds to represent everything that's tired and obsolete about Microsoft's transparent, corrupt (but natural) messages against Open Source & Free Software. Google itself -- built upon Open Source technology -- is the manifestation of the open flow of ideas and connections made possible by the Internet.

If we are entering a new era, too, of IT systems built on open software standards (see MassGov), of Service Oriented Architectures (“SOAs”) and On-Demand modular components that map cleanly to business processes, what is the place of the inflexible Client-Server, or shall we call it the “Rich Client,” model? If you are holding back your organization from this change, you will be replaced.

The differences between Google and Microsoft -- their provenance and their culture -- are illustrative: one is of the Internet...

September 28, 2005

Microsoft's Reorg: a Pear Solution to a Peach of a Problem

In the wake of senior talent defections to Google and elsewhere (back in July I was gloating at the Kai-Fu Lee defection), Microsoft leadership leaped into action. (You noticed last week's reorganization news.) Trouble is, this reorganization is a solution to a non-organizational problem.

The problem Microsoft faces is one of The Innovator's Dilemma, which is described plainly in that book (Harvard Business School Press, 1997) by author Clayton M. Christensen. Good companies tend to fail – when they fail – because they are good.

The objectives of the Microsoft reorg seem to make sense in any common corporate setting where products and markets are maturing. The identified problem is that talent is leaving in frustration at not being able to get things done. It's reported there is a bottleneck getting face time with senior decision-makers. Delivery for things like handsets has been too slow in fast-paced markets like gaming. There may also be the problem of dour incentive: MSFT is stuck in a range. The reorg solution creates three president-figures below Gates & Ballmer who can pull the trigger with discretion. The choices probably can't be faulted on face, yet the main problem at the fundamental level of Microsoft's software markets goes unaddressed.

The problem is a classic: it is both fundamental and it is staring the company in the face (see boilerplate in their SEC filings). Yet managers can't seem to accept its reality or decide the nature of the threat, or agree on what to do about it. The problem is the new presence of a disruptive innovation which is both cheaper and (apparently) provides less functionality than Microsoft's flagship, Office. But this new market entry is starting to satisfy most of the requirements of Microsoft's customers, all while Microsoft is focusing on premium features outside, well above, the customers' requirements and price range.

According to Christensen, when good, even great, companies fail it is because their behavior and culture is locked into patterns determined by the environment in which they won success, by the products, capabilities and value networks they established which are now leading the leaders to be highly effective at killing ideas their most profitable customers do not want. Always the natural drive from training and successful experience is for higher margins and even larger markets. When, for example, Arsene Wenger or Jose Mourinho add a player, their default mode is to try to find one of singular ability who is better than any of the ones they already have. These tendencies are as natural as they are flawed.

The problem is that Microsoft officials see no reason for realistically addressing the lower-profits and small, remote customers who are taking up OpenOffice, and by the time they find effective ways to compete, the markets will have shifted irretrievably. The main strategy appears to be negative public relations while “Shared Source,” “Local Language” and “Windows Lite for Asia” programs are half-hearted stabs at doing something – anything – to shore the levee from the disruptive innovations flowing out of Open Source & Free Software (“FLOSS”).

To compete, Microsoft needs to form a new independent company based on components like Linux, Firefox and OpenOffice and wade down into the marginal markets being soaked up by FLOSS. That new company should have the brief and get free reign to cannibalize Microsoft's core Information Worker businesses faster than anyone else. They're good at marketing and this entity as a full-blooded Open Source company could out-manuever Red Hat, Novell and Canonical/Ubuntu (but not IBM) in one swoop. While they wait for the reorganization to show results, FLOSS will be gaining stride in Massachusetts and other state governments in the United States. History repeats itself and soon enough Microsoft will be just another item on the list of incumbent losers to disruptive innovation.

September 27, 2005

Defining Innovation

"The Collaborative International Dictionary of English v.0.48"
Innovation In`no*va"tion, n. L. innovatio; cf. F.

1. The act of innovating; introduction of something new, in
customs, rites, commercial products, etc. --Dryden.
1913 Webster

2. A change effected by innovating; a change in customs;
something new, and contrary to established customs,
manners, or rites. --Bacon.
1913 Webster

The love of things ancient doth argue stayedness,
but levity and lack of experience maketh apt unto
innovations. --Hooker.
1913 Webster

3. (Bot.) A newly formed shoot, or the annually produced
addition to the stems of many mosses.
1913 Webster

September 26, 2005

White Stripes at Coney Island

Ben Ratliff in The New York Times does justice to the "manic drive" and "shockingly beautiful stage set" of the White Stripes.

"In the Loop: Serenity, Freakouts and Craft" | The New York Times

September 03, 2005

Objective versus Result

Almost all absurdity of conduct arises from the imitation of those whom we cannot resemble.
- Samuel Johnson

In the 1960's, a highly specific aspect of this idea was articulated by the influential photographer, Diane Arbus, as the "gap between intention and effect."

Shown: Young Man in Curlers (Diane Arbus, 1966)