Saturday, April 10, 2010

Limping or leaping?

In these rapidly changing times, more and more organizations are facing the troublesome question of whether to limp on with the products they have or go for the big leap.

Back in 1987 when Richard Foster wrote The Attackers Advantage, breakthrough products and services occurred rarely, but when they did they leapfrogged the competition with productivity gains in the 100-1000% range.

Now they are the norm. 

Foster was one of the first to apply Kuhn's theory of scientific revolutions to business. His S-curve model explained how new technologies - every so often - transform markets. Like electricity, the motor car and the computer. And are many times more productive or efficient.  

Foster showed that new, "breakthrough" products or services appear "out of nowhere" without any warning. They cannibalize the market for the products they displace, and several others at the same time. Think the photocopier which wiped out carbon paper, the spirit duplicator and much of what we knew as small offset printing. 

S-curves come in pairs. They describe the adoption trajectories of old and new technologies. 

There is gap between each curve, a discontinuity. It is here that the fate of incumbents and attackers is decided. Sometimes the first mover wins because they gain so much momentum. Sometimes the incumbents win because they have resources. Even old technologies can sustain a miraculous recovery and persist long beyond their "use-by" dates, like the very persistent "knowledge telling" model of school education.

Richard Ogle, author of Smart World, sees breakthrough ideas in terms of new "idea spaces" which emerge out of several earlier and mature "idea spaces" and which offer a better explanation for how the world works. Think the realization that the DNA molecule was a double helix, or how light and matter are connected in the theory of relativity.

New breakthrough products are often "clunky" at first. But as they gather support over a half dozen or so years, they gain momentum. Critical customers come on board, and little-by-little they shed the clunkiness, until one day, after many iterations, the product becomes so simple, so easy to use and easy to acquire, it captures everyone's attention and imagination. And starts to fly off the shelf.

Like the iPhone, which at last count had 174,000 applications available. This amazing portable device combines the computer, phone, video and music entertainment, global positioning system, banking portal and is challenging dozens of product and service segments simultaneously.

But there are dangers in moving too early, before an idea space is mature, and ripe for re-invention. Dudley Lynch and Paul Kordis, make this point in their book, the Strategy of the Dolphin. Early movers can burn through a lot of resources if their brilliant idea is too far ahead of the times. Late movers may never recover because the are so far behind the leaders. Those who start just ahead of the changing times, have a reasonable chance of success, but can also be overtaken by financially well-resourced and powerful copyists.

 So here's a workshop to explore whether you are safe (or not) from a challenge:

1. In what ways are your customers unhappy, angry or concerned about your product or service, and what would they like to be different?
2. Thinking about what your customers would like to be different, what new products or services are emerging or available which may meet your customer's needs better, and make them happy or delighted?
3. Thinking about your product or service, what are the latest scientific theories about your "idea space" and to what extent are you in alignment or not?
4. If there is a new theory in your idea space that supports a radical new manufacturing method, distribution method or product feature, what is it and what could it allow someone else to do (and which you can't do)?
5. What minor challenges are you currently facing in the marketplace from products or services in different categories to your products/services that seem to encroaching on your space, just a little?
6. What evidence do you have for new jobs being created around other new products/services?
7. What evidence do you have for declining work opportunities for people who use your products or services or supply them as part of their work?
8. What idea spaces appear to be coming together? Describe them.
9. To what extent are the new products/services well before the times, ahead of the times, or with the times?
10 What idea spaces could/should you bring together in order to create a product that survives new challenges?