Jul 6, 2010 | Customers, Innovation, Marketing, Strategy
The easier it is to quantify, the less it will be worth. This appears to be a pretty harsh judgment, but the reality is that if you can quantify and standardise something, it can be copied.
This is the case, until you consider the value created by subtle differences, particularly in consumer products, and original creations, a painting, poem, piece of music , new gadget, a new expression, or a new use for a staple product
An original Van Gough is worth tens of millions, but a copy it would take an expert to pick, done by very capable technicians in China, can be had for a modest amount. It is not that the copy is a lesser painting technically, it is just not the original.
Seeking the original is the core of innovation and commercial sustainability, as the alternative is to chase the cost curve to the bottom, where in the long run, the best return possible for the lowest cost producer is around the cost of capital.
Jun 24, 2010 | Change, Innovation
The current debate, such as it is in Australia in relation to climate change, is all about the sort of tax regime that is required, and the need to change peoples behavior, and thus their attitudes.
What all this misses is the fundamental nature of the change that is needed, and the only way to get that is to recognise that commercial opportunity and activity will eventually deliver the answers (although it is likely we will not like all of them) by providing the incentives and long term funding of technical development, then commercialising it.
The role of governments here should be to assist in creating the field in which the technology, typically with 20 year horizons, can evolve. Playing with today’s tax regime is just putting a band-aid on a gaping wound, useless as anything beyond a gesture.
This argument is put very convincingly by the clip “Reinventing Fire”, that has come from the Rocky Mountain Institute, a very smart think tank and technology developer in the US. It deserves some air-time.
Jun 9, 2010 | Innovation, Management
How do you figure out the productivity of employees paid to think?
In the old days, productivity was measured by a range of quantitative measures, quantity, cost, conformance to standard, cycle times, and so on. Now, when the productivity is ideas, improvements, removal/adjustment of past practices, and the “joining of the dots” it is harder.
When there is a clearly available substitute, the market dictates the price, it costs $60 an hour to get your car serviced, but where there are no obvious substitutes, it is more a matter of what the market will bear. What is it worth to hear a competent musician play a cover? What would it be worth to hear the piece played by the originator?
Competent musicians are relatively common, those who can create something worth covering are rare, and are paid accordingly, and the time it took to create the piece plays no part in the calculation, it is all about the value created, and measuring that is a whole new ballgame.
Jun 7, 2010 | Innovation, Marketing, Social Media, Strategy
Will the iPad and Kindle do to books what has happened to music? You have to believe they will. At the moment, it is the early adopters who are looking for books electronically, but it should not take too long to become mainstream.
It would be silly for publishers to become resisters rather than figuring ways to embrace the change that will happen, drive it, and thereby build a sustainable new business model. The core to that success will be the “ownership of the relationship” with the readers. Currently that is via the publisher who has control of the channel, apart from the few “big name” authors who have their own following, built after a publisher has invested in them.
The new e-readers offer a disintermediation opportunity for authors, one they will grab, so the role of the publisher is about to change, but how many of them see that?
Thinking about the potential for e-marketing of books also puts a gun to the head of the dumb restrictive publishing rules that exist in this country. I cannot buy a book published in the US in Australia unless a local publisher, or off-shoot of a British one, has chosen to publish here, adding another margin that has absolutely no value to me. Until recently, I did not have an option, then Amazon popped up, then the Kindle arrived, and now the iPad. Now there is a new set of rules emerging from the marketplace, and the existing regulations no longer have the control, so have become irrelevant.
Can somebody please tell the publishers and their cronies in the government, and I wouild not be too keen to buy shares in a book retailer wedded to the expensive shop front in Westfield.
May 31, 2010 | Innovation, Strategy
Providers of what eventually become seen as “Legacy” systems have the most to lose from a disruptive innovation, so they usually fight the hardest to maintain the status quo simply because they have so much to loose, and the collective vision in the business obscures the potential of the innovation to disrupt and destroy their existing franchise.
Kodak, invented digital photographic technology, but the margins in photo processing business were too attractive for them to disrupt themselves. Kodak simply failed to take the next step and go beyond film, and as a result is a shadow of its former self, its cash cow of film processing virtually gone.
Similarly, Polaroid “owned” instant photography, they had figured out how to apply emerging digital technology to photography, but the sunk cost of the existing business model was huge, they were a virtual monopoly, they underestimated the market drastically, so they sat on it, believing they had too much to loose by disrupting the ststus quo. Too bad!
Look at the frantic legal rear-guard action that has been a feature of the on-line music war, and the current woes of the newspaper industry, in both cases the losers have been the former incumbents, who had the game sewn up for years, and had the resources to remake their business model.
The only way to ensure longevity, is to be the one disrupting your own market.
May 27, 2010 | Innovation, Management
The formula for innovation success is different in each set of circumstances, but has some consistent themes: time, determination, patience, skill, top level support, collaboration, a combination of analytical and spatial skills, engaged participants, process discipline, and tolerance of failure.
The reasons not to innovate are far more creative, but have the common theme of finding an excuse not to stretch. The link is to a list of the 100 most common excuses, it is a bit of fun, but there would be few excuses lisited that we have not all heard at some time.
