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.

Crowdsourcing - Part V - Joint Ventures in the 21st Century?

Part IV - Recognizing Value

Part III - Educating Customers

Part II - Healthy Lifestyles

Part I - The Big Picture

I've written several times about my belief that the 2008/2009 econalypse and losses of thousands of jobs will be the tipping point to drive companies to move to a much more distributed model of business interaction. I call it "2 Guys and the Internet", and it's focused on the concept that it has become so easy to interconnect your business with others that have expertise that you do not need to have in-house.

Crowdsourcing Question - If you were starting a new company today, and had the option of creating a joint venture between several smaller (existing) companies, or using the "2 Guys" model, which would you choose, and why? The joint venture would bring together expertise in several critical areas for this market (distribution, sourcing, industry knowledge), but does the value of the JV outweigh the challenge of integrating those management teams? Which way would you go?

Why am I not driving an electric or solar car?

Following up on the 21st century concepts discussed previously, and considering how rapidly the technology seems to be evolving, I need to ask myself the question...why?  My commute to work is about 45-50 miles roundtrip, in partially rush hour traffic, and it's probably sunny 300+ days a year here in NC.  I drive to the office or the airport in my car, and the rest of the time with the family in the van.  Maybe it's time for me to investigate this more deeply on a personal, professional and investment level.  

Question(s) of the Week - Killer Questions

One of the comments you hear frequently mentioned throughout all the doomsday news reports is that the greatest innovation often comes from down times instead of good times.  I'd tend to agree with that..."our backs are against the wall"...."necessity is the mother of all invention", etc, etc..

At my previous company, when I was working in one of their Incubating Technology groups, I used to frequently read Phil McKinney's Blog.  Not only does Phil lead one of the large innovation groups at HP, but he also gives back quite a bit of time to explain and explore the lessons he's learned about innovation in his career.  I still subscribe to his Killer Innovations podcast, but I had lost track of it as I changed jobs and got heavily invested in the MBA program.  But recently I found myself listening to the podcast again, and also spending some time thinking about Phil's Killer Questions.

When I first started this blog, I considered a segment called "Decision of the Week".   But the more I read things like Umair Haque's 21st Century Growth Manifesto, the more I think my time would be better used in trying to weave together Phil's questioning model with Umair's problem structure model and a few sprinkles of my ideas (and hopefully my classmates). Focusing on today's decisions may just be an exercise in extending 20th century thinking that isn't going to work much longer.  

"Decision of the Week" - Building a 21st Century Car Company

OK, here goes...we're going to see if we can create some interaction on the site. This question is open to everyone, and all comments are welcome. I'm thinking this one relates to everyone (we almost all drive cars) and it relates to class, as we're taking a mix of Marketing, Operations, Technology and Accounting classes.

We've all been watching as the Big-3 US Auto companies fly to Washington DC and ask for money (bailout, bridge loans, etc.). I believe the total is somewhere between $25-$34B at this point. While these companies all have their share of HUGE challenges (retirement costs, union costs, inefficient operations, poor brand images, etc.), they also have a number of valuable assets (engineering knowledge, production facilities, etc.).  

So here's the question... 

What if the US Gov't (Congress, TARP, Treasury..whoever) decided that instead of giving the existing companies the $25-$34B, they were going to give it to you and asked you to create an automotive start-up. You'd be allowed to pick and choose from existing US Auto expertise, personal, facilities, suppliers, etc., because they all went under. How would you build a 21st century automotive company?  

Some initial thoughts...

My initial thought was to see if I could envision an automotive company being setup and run like a Silicon Valley company that sells hardware and software.  So this new company might look something like this:

• Design - This would be a combination of world-class engineering talent (in-house) and the use of crowdsourcing efforts to continue to stimulate innovative ideas and leverage "proudly found elsewhere" mentality for global ideas.  Build communities of potential consumers to give you real-time feedback on potential designs and demands.
• Production - Why do the automotive companies need to own their own plants?  I wouldn't advocate outsourcing all the production, especially since the funding came from US Taxpayers.  But I would advocate using some of the funding to kick-start a few production facilities that would be spun-off and allowed to compete against each other for the business.  
• Sales and Distribution - We buy books and media from Amazon or iTunes.  We buy groceries and homegoods from Target.  But we have to go to a brand-specific dealer for a car?  No way does that model continue.  And I'm not even sure the Auto Superstores are the right answer either.  
• Messaging & Vision - Maybe this is really advertising, but the American automotive companies really need to start making ads that create a desire to be in their cars. Knowing that I get the employee discount does nothing to give me that awesome feeling you get in a new car and the adventures it could bring.  

OK, that's a few starting points.  I'm interesting in other areas of innovation, or other aspects to consider for change.  Ideas are welcome....