Monday, December 21, 2009

Open Technology

Recently, Google posted a blog where they provided Google's definition of "open". In that post, there was an interesting section about how open systems can be viewed by people with traditional MBA training.

"To understand our position in more detail, it helps to start with the assertion that open systems win. This is counter-intuitive to the traditionally trained MBA who is taught to generate a sustainable competitive advantage by creating a closed system, making it popular, then milking it through the product life cycle. The conventional wisdom goes that companies should lock in customers to lock out competitors...."

Most of my working career has been centered around an "Internet DNA", so maybe I'm overly biased, but this is a comment that I made to my classmates time and time again as we studied different scenarios and cases during our program. The numbers are fine, and thorough analysis is necessary, but too many times it leads to decisions that don't result in driving new customer value. It results in decisions that create short-term advantages, or temporary "wins", but it often misrepresents whether or not a company is truly prepared to be competitive in the market, and how they can position themselves for the next opportunity.

The 21st century is not going to be about long-term sustainable advantages. Advantages will be short-lived, and the companies that survive and succeed will be those with a open mindset that encourages competition. Competition drives innovation.

Competition also makes some people &/or companies uncomfortable because they were built around an inflexible model, or one that doesn't allow for radical changes in the market structure. Google is an excellent example of a company that is constantly trying to change the dynamics of markets. They are not always right, and actually fail quite often, but their culture and business are built on the foundation of competition. Many companies would do themselves a favor by studying Google and adopting their mindset to open systems.
blog comments powered by Disqus