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Where leaping to conclusions is my primary form of forward motion.
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Thursday, May 17, 2007
Amazing Discovery - Innovation Is Not A Strategy
The cover story for the May 3 issue of BusinessWeek was "World's Most Innovative Companies" The big point was that the idea of running around as a multi-millionaire CEO chanting the word innovation as if it would magically alter your organization has now been recognized as another in the long line of stupid management fads.[...] At the behest of an "ideation" consultant, he donned a blue superhero costume—cape, tights, and all—to put a little extra oomph behind the company's innovation-boosting campaign. "I guess the thinking was that if you free people from the norm, you'll unleash a torrent of creativity," says Scott Anthony, president of Innosight, a consulting firm co-founded by Harvard Business School professor Clayton Christensen. Anthony refused to name the company because it was a client. "Innovation Man led to a lot of laughs," he quips, "but it didn't lead to a lot of innovation."According to the article many CEOs, having failed at turning their billion-dollar behemoths into innovation engines, are experiencing "innovation fatigue." I am shocked! Shocked, I say. Shocked to learn that innovation is not a commodity that can be ordered up like Papa John's Pizza. Shocked to learn that innovation doesn't exist on its own like, say, cotton.
The same might be said for many gimmicks that companies have tried over the past few years in their attempts to boost growth. Suddenly trendy, innovation took on the flavor of an elixir, as companies raced to hire "chief innovation officers" and build innovation centers complete with purple-painted walls and conference rooms with funny names. Ford Motor Co. (F) boasted in a press release about its new Innovation Acceleration Center in Dearborn, Mich.: "It's amazing what a room filled with radio-controlled cars, a 3-ft. Statue of Liberty made of Legos, and some comfy couches can do to stir the imagination." [...]
It turns out that innovation is actually a result - something that happens after you change every aspect of your stodgy, corrupt, inefficient, overbearing, outsourced, badly managed global corporation where everyone spends 80 percent of their time in meetings, 20 percent of their time doing reports, 10 percent of their time fixing stuff someone else did wrong, and 5 percent of their time doing something valuable that a customer will actually pay for. (I know, that's 115%. That's called increasing productivity. Guess which 15% gets dropped when your average, everyday human realizes they can only give 100% today.)
And this turns out to be very, very hard.
But there are a few innovative companies. And they're innovative because, well, because they just are. Because they actually do the hard things most companies can't, or won't, do. Because they focus on things far more tangible than "being innovative." Things like finding and hiring talented employees and then not stomping on them or burning them out. Things like actually listening to employees with good ideas. And things like not letting the accountants and lawyers decide about what does and does not get done.
Mostly, innovators just seem to understand that innovation is a fundamental result, that comes from getting the fundamentals of running a business right. What a shocker.
Terry Frazier at 4:34 PM
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Monday, April 30, 2007
Private CIAs
John Robb, independent military analyst, futurist, and author of “Brave New War,” on Friday posted this interesting tidbit on Friday regarding the move by GlobalCos into the intelligence and security space:JOURNAL: Private CIAs
A strong sign that the nation-state is in decay is the frequency we see announcements of companies that are replicating some of the most sensitive government services. The most recent mover is Walmart, which is in the process of putting together its own intelligence arm (it's being built by a former CIA/FBI officer Kenneth Senser). For those unable to afford their own global intelligence unit, Blackwater's Cofer Black is building one called Total Intelligence Solutions.
If you want to get up to speed quickly, the background for this is available in BNW.
This makes sense, of course. As these companies plan long-term deployments across the globe they can little afford not to know the risks involved. And the intelligence fiasco of Iraq WMDs showed how unreliable government intelligence can be. This looks, to me, like another area where oligopoly control of a market makes sense. I wonder how the potential for shared intelligence organizations, and perhaps shared risk, will alter the oligopoly landscape?
Terry Frazier at 10:22 AM
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Thursday, February 9, 2006
Antergy
What’s the opposite of Synergy? It’s Antergy. Oligopoly Watch coins a new term for the cyclic stupidity of the corporate world. And, as is always the case, CxOs and consultants make beaucoup bucks on both ends – buying up things that don’t work together under the pretense of synergy, later selling them off on the pretense of releasing value. One metaphor for this is the human body. The body takes in various foodstuffs, holds onto them for a while, strips out the valuable components, and excretes the remainder. Somewhere in the process energy is created and we, the owners of the body, benefit from the process with health and life. So it is with corporations, except the CxOs and consultants are the ones who absorb all the energy in the form of bonuses and fees. The customers, employees, and shareholders often get only the excrement that comes out at the end.
Time-Warner sells book unit
One day after we note the frantic rush by the media oligopolies to spin off non-core assets then it happens once again. Time-Warner, under heavy pressure from a small group of determined investors, announced it has sold off its book division, to France's Lagardere, in a $538 million deal.
This is no big surprise. Time-Warner shopped around the book division three years ago, but has not until now found a buyer at an agreeable price. Reports are that the book division had a record year in 2005. Imprints owned by Time-Warner include Warner Books; Little, Brown & Co.; Arcade; Back Bay; and Bulfinch Press
Time-Warner was a second-tier player, #5 in the US publishing industry, considerably smaller than Bertelsmann (Random House) and Pearson (Penguin). That industry shows little added growth, making opportunities for growth without acquisitions unlikely.
Lagardere is best known for publishing magazine like Elle, Car & Driver, and Paris Match through its Hachette Filipacci division and books through its French-based Hachette division. The company has some online and newspaper interests as well. It also has minority holdings in such unrelated industries as aerospace and cable TV. It will become the #3 book publisher worldwide after the deal. Lagardere bought British publisher Hodder Headline in 2004.
For Time Warner it's yet another sell-off of a division. The company has sold off the Warner Music Group, its share of Comedy Central TV station, and some sports teams. It entered into an alliance over AOL with Google, and rumors are always strong that it will sell off the whole AOL division (if it can find a buyer). In addition, it recently combined its WB network with Universal's UPN in a 50/50 split.
The Time-Warner proxy rebels led by Carl Icahn have announced they want the company split even further, into four new firms, namely Time-Warner Cable, motion pictures and TV networks, magazine publishing, and AOL. As with Viacom, the idea is to "release" a lot of pent-up value, the very opposite of synergy, namely antergy.
Terry Frazier at 12:34 PM
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