Sometimes Winning Requires Failure

This post is the product of a conversation I had with a colleague at breakfast the other day while on the road making customer calls.  The conversation we were having was about technology companies and specifically leadership teams within technology companies.  The genesis of this post is the thesis that companies get trapped in loops.  I have posted on the subject of creativity theta before and I have not been dissuaded from my thesis that many people in tech are repeating the same processes, the same week to week actions they have been doing for years.  I call it creativity fail; most CxOs call it hiring someone with experience.

I had this creativity fail loop concept perfectly framed for me by a former colleague who works at a late stage startup that recently hired a new VP of Marketing.  This former colleague told me the new VP was busy hiring their old team including a director to oversee trade shows.  Trade shows…wow…back to the 90s on that one.  Can anyone tell me who was president the year that the last customer with buying power attended a technology trade show?

This is a microcosm of technology industry and what I term as creativity fail.  People are building the same products they built in previous careers, for the same customers they had in previous careers and result is the process becomes stale.  Unfortunately, many people are expecting the same result and are perplexed why they cannot repeat the same level of success from twenty years ago using the same strategy and tactics.

The success of a technology company is really about product cycles.  Technology companies become stuck in loops because product cycles become affected by success.  The more success a technology company has in winning customers, the more these customers begin to dominant product cycles.  As product cycles become anchored by the customer base, the plan of record (POR) suffers from feature creep and the ability of the company to invest in products for new customers and new markets declines.  Consider the following:

New Technology = Velocity

Developed Technology = Spent Capital, Doctrine, Incrementalism and Creativity Fail

With the passing of Steve Jobs and the success that Apple has achieved over the past decade, there are many books and blogs and papers to read on why Apple succeeded.  I would say that a significant reason for Apple’s success post the return of Steve Jobs (1997) was it had failed and it was willing to acknowledge failures and abandon technology anchors that did not provide velocity in business.  Steve Jobs was not born with this ability, he had to learn it.  He learned it because Lisa failed,Newtonfailed and the PowerPC loyalty was a failure.  To win in the future an existing technology company must fail.  Apple’s failures allowed them to break from the past and build anew.

Considering my pseudo-equations from above; having worked in mature technology companies I have learned that a difficult trap for leaders is breaking from the present which is anchored in the past.  Executives, especially in public companies, look at their customer base and this base equals a large percentage of present and future revenues.  To support this base a high percentage of R&D dollars (i.e. incrementalism) are allocated to supporting the base.  Armies of people and processes (i.e. doctrine) are created to support existing markets.  For many people within a company this is a comfortable place to be.  Their daily processes (i.e. reports, procedures and actions) and week to week employment requirements are well defined and understood.  That is the path to incrementalism.  The trap becomes self fulfilling because corporate leaders find it hard to break from the past.  It is comfortable for corporate leaders to build to their base.  It is immensely difficult for corporate leaders to have the courage to say no to the past created from developed technology and build towards future markets.

I have some additional ideas for what I think are interesting entries that I will post over the weekend or next week.

/wrk

* It is all about the network stupid, because it is all about compute. *

** Comments are always welcome in the comments section or in private. **