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February 27, 2007
Entrepreneurial Japan - that's news!
In the February, 2007, Harvard Business Review, there is a wonderful short piece on Entrepreneurial Japan. It notes how many trends -- the end of guaranteed lifetime employment, changing governance structures, the changing social attitude toward independent entrepreneurship and an increase in the number of successful role models - are coming together to create a far more exciting environment for those who would like to do things differently.
This is such a wonderful development to hear about. And I'd like to draw attention here to one of our colleagues, Dr. Takeru Ohe, who has been trying to get Japanese business to think more entrepreneurially for several decades now. One of his latest ventures is to run a summer camp that teaches entrepreneurial skills to youngsters, hoping to take that next generation even further.
To put in a plug for Columbia - we are running a course on creating strategy in July (24-26) that I direct (which means I'm there the whole time) which hopes to draw on some of the entrepreneurial energy now infusing the economy. See the web site http://www0.gsb.columbia.edu/execed/open/programs/japan_strategy.cfm
Posted by Rita at 04:49 AM | Comments (0)
February 22, 2007
From good ideas to actual businesses
Our colleague, Walter Derzko gives some interesting insights into why good ideas don't get results - see his blog at - http://smarteconomy.typepad.com/smart_economy/2007/02/why_good_ideas_.html
With respect to innovation, one study suggests that you need 3,000 ideas to get one commercial launch - see this article: Stevens, G.A., J. Burley. 1997. 3000 raw ideas - 11 commercial success! Research Technology Management 40(3) 16-27.
In a recent study my colleague Thomas Keil and I have just finished, we found that very different management processes are needed to make sure that outcomes other than launch result in good ideas getting circulated in a company.
Posted by Rita at 09:07 PM | Comments (0)
Creating a more innovative culture
I was recently asked how one creates a more innovative culture within a company, with specific reference to Kodak.
The difficulty is that as companies become successful, their performance increases to the extent that they stamp out those people, practices and methodologies that don’t fit the success model. In a word – they get very fixed and rigid on perceived right way to do things, which makes it extremely difficult to embrace change when it happens. In Kodak’s case, this was coupled with an entitlement culture which meant that people never thought there was any risk of things going wrong in the core business.
How to spread a new culture throughout the company? Well (perhaps unfortunately) a near-death experience has a way of focusing the mind and overcoming resistance to change. So you need to create or capitalize on a compelling case for making the change.
I think next, it’s really vital to have a clear view of what a better future could look like. Kodak for years struggled with this, with misbegotten forays into everything from pharmaceuticals (remember that disastrous Sterling Drug acquisition?) to medical devices and the outputs of their Kodak ventures program. The ink jet project is appealing in that everyone can understand and grasp what the company is trying to do – it’s a nice, easy story to tell, and it’s something the whole employee base can relate to.
Then, you need to have visible, early successes to share the news and convince doubters that the future is in good hands. It is also absolutely vital that the senior team model the behavior they want in the culture. Rewards, recognition, promotion and other goodies for risk-takers is good. Strong positive symbolic messages help too.
Finally, I think it is important to realize that you don’t change a culture through culture change programs. You change a culture through the way that the organization competes to win. Doing work differently eventually leads to a different culture.
Posted by Rita at 07:23 PM | Comments (0)
Desperate shortage of the college educated
I heard a fascinating statistic the other day that really should give all of us pause. It seems that 2/3 of all jobs in America require a college education, yet only 1/3 of the potentially eligible population goes to college in this country. Either we are going to have to drastically ramp up our numbers enrolled, or we will face an even more serious skills crunch than we already have for employees with sufficient skills to work in our new economy. That was really interesting.
Another issue that I don't think we have grappled with very well is the fact that as the economic basis of our businesses change, the skills we need to deploy change as well -- and yet we make few provisions for upgrading skills throughout the life of an employee, consistently and on a planned basis.
Posted by Rita at 07:15 PM | Comments (0)
XM and Sirius to merge - Why are we not surprised?
So XM and Sirius satellite radio have announced that they are finally going to merge. We called that one years ago! What the two have been doing is engaging in a competitive war of attrition that is guaranteed to end with one killing the other off, or in a desperate bid to avoid the ultimate game of competitive chicken, a merger such as the one proposed.
What is fascinating is how companies get themselves into these situations over and over again. Almost the exact same scenario played out years ago with British Satellite Broadcasting and Rupert Murdoch's Sky TV satellite network. The two went head-to-head with incompatible systems, losing millions of pounds each month, until a merger deal was finally forged, combining the two into B Sky B.
Or what about the 3G debacle in the telecommunications markets? Same idea.
The assumptions underlying such 'war of attrition' situations are similar. One party believes that if they can just outlast the other, they will have a monopoly hold on a major market, which will make it all worthwhile in the end. Or, conversely, they believe that eventually their superior product, business model, customer service, whatever, will swing enough customers their way that they will prevail. Not usually true.
In class, we play a game in which we auction off a dollar - the winner gets the dollar, while the loser has to pay the winner. With competitive pressure behind them, I've been able to sell that dollar off for $2, $3 or even more. Savvy managers, though, stop before they get sucked into that situation.
Posted by Rita at 07:06 PM | Comments (0)
February 19, 2007
Book recommendation - The Halo Effect
Our good friend Phil Rosenzweig has just published a terrific book, called The Halo Effect. It's main thesis is that we come to a lot of erroneous conclusions because knowing the outcomes biases our reasoning. It's a fascinating read.
For more on Phil and the book, check out his website -
http://www.the-halo-effect.com
Posted by Rita at 03:06 PM | Comments (0)
What Americans spend on pets
I ran across the following mind-blowing numbers - and came to the conclusion that there are vast sums of money out there if one is creative enough to capitalize on what people are willing to buy!
$38 Billion - Amount Americans spent on pet food and care in 2006, nearly double that spent 10 years ago
$2,000 - cost of a doggie nose job in Los Angeles
$395 - cost of a Burberry dog bed
$50 - price of an oatmeal body wrap for big dogs at LA Dogworks, a doggie spa
47% of dog owners say they buy holiday or birthday gifts for their pets.
Posted by Rita at 03:03 PM | Comments (0)
February 10, 2007
Failing to invest in innovation when times are good
Yet another great company (in this case, Dell) has fallen victim to a failure to engage in business model innovation when times are good. We see this all the time - hugely successful corporations get so wrapped up in exploiting their own business models that they fail to invest in the innovations that will help create their future success. Then, when things start to go wrong, they go on an all-out quest to find new sources of growth FAST, condemning their growth leaders to rushed, desperate and usually failed innovation efforts.
About three years ago, I was having a conversation with two CEO's of major computer manufacturers who observed that Dell's strategy was simply piggybacking off their R&D and other investments in innovation in the computer industry. They feared then that Dell would stunt the growth of the entire PC category be rendering innovation un-economic. Looks as though the model has actually come back to hurt Dell - its competitors have innovated not only in their products but in their production prowess. Moreover, turns out that many customers actually like to interact with a real salesperson when purchasing complex or new equipment. So advantage to HP, Best Buy, and other retails, disadvantage to folks like Dell.
Posted by Rita at 05:50 PM | Comments (0)
February 02, 2007
Astonishing errors
As I do every year, I'm in the midst of reviewing papers for the upcoming Academy of Management in August. The quality of the writing has always bugged me, but I particularly notice it when I go through a lot of papers. Typos, grammatical errors, spelling mistakes and mis-citations galore. What is disturbing is that this material is being sent to an academic conference on the presumption that it represents high quality social science, and that we as consumers of that research should believe what the authors are saying. And yet, they can't even write properly and in correct English. As I said in my review comments to one author: If something as simple as typing text is so error-prone, how can you expect me to believe that the rest of your research is not as sloppy? Just amazing.
Posted by Rita at 07:29 PM | Comments (0)
