Wednesday, July 8, 2009

Sign #1 that you work for a Big Company

We haven't gotten to the formal "How to Manage like a Big Company" course in the program yet, but we've analyzed plenty of case studies that highlight how to quickly identify that a company is in protection mode and no longer intends to add value to their market or for their customers.

Here's a perfect example from the PC / Netbook market, which we analyzed back in ITMgmt last semester. The model for unnovation goes something like this:
  • New competitor comes out with a new product/concept/service, which initially seems radical or crazy (to your way of thinking).
  • Big company immediately dismisses the product in public forums.
  • Big company talks about how that model is bad for everyone in the industry. Essentially creating a negative-sum game.
  • Big company internally creates a taskforce of people to explore if they could do it. They usually take existing people from their semi-competitive product line to evaluate it, biasing the results from Day 1.
  • Internal taskforce can't figure out how to make something better, since they are using the new product as a template (to copy).
  • Internal taskforce decides that it would be better to dumb down an existing product and claim market-share in the existing market.
  • Company publicly announces that the new market is viable, and one of their growth areas.
  • VP from a previously failing group gets internally promoted to SVP/GM of the "new" division, because he has experience in new markets. This is sort of like when losing head coaches get recycled in the NFL or NBA.
Hence the unnovation cycle begins and becomes the new strategy for the company. Ignore the fact that their cost structures, market analysis, distribution channels all probably need to change in this new market. Those can all be "fixed" later.

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