It's Difficult to Focus on Multiple Things at the Same Time

As the Germans learned in WWII, after bombing Pearl Harbor, it is very difficult to fight a competitive battle on multiple fronts. Valuable resources get spread too thin. The best people aren't all aligned to a common strategy. Communications becomes more difficult.

The recent Google Chrome OS announcement is going to create an interesting battle for a number of reasons:

• Technology innovation (Desktop OS vs. an Internet OS)
• Freemium vs. Premium Pricing Models
• How many battles can either company sustain and still be successful in their core businesses?
• How much is Google willing to put into their non-search businesses in order to keep Microsoft from gaining traction in search?
• How much is Microsoft willing to put into Core OS (Windows) or the Internet version (lower margins) to maintain those cash flows?

And of course the most important question for MBA students - do each of these projects create a positive NPV? (ok, being sarcastic)

It must be fun to sit in the war rooms of either Google or Microsoft and plot how to block or take the other guys market (on a huge scale). Of course we do need to continually ask ourselves, are any of these actions add real value to their customers, or are they potentially opening themselves up to new competition?

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.