Innovation Silicon Valley Style

People First is delighted to share work that is relevant to our initiatives. Geoffrey Moore is an author, speaker and management strategy advisor. His work has influenced the careers of many of us at People First and we are excited he granted us permission to share this particular article.

There is a cottage industry in conducting executive tours of Silicon Valley, and now increasingly San Francisco SOMA, to expose teams from other parts of the planet to what is admittedly a uniquely successful culture of innovation and wealth creation. I’m all for it up to a point. Where I part company from the herd is with the notion that global corporations have a chance in hell of playing the same game. They don’t. Here’s why.

To quote a hopefully soon-to-be would-be candidate for president, Silicon Valley’s version of the innovation game is rigged! That is, it is specifically designed around a venture capital oriented ecosystem that is uniquely aligned to support investments in disruptive innovation. The limited partners who fund VCs want their money put into these high-risk, high-reward endeavours. The VCs that parcel out that money interview entrepreneurs to pick the best ideas, plans, and teams to prosecute a disruptive innovation. The ecosystem of service providers needed to support these fledgling enterprises is deeply experienced in navigating the economic gyrations brought on by the Technology Adoption Life Cycle. And when any individual joins one of these companies, he or she knows their sole mission in life is to bring the targeted disruptive innovation to scale as fast as possible, come hell or high water, Devil take the hindmost. Now, I ask you, where else in the world could you expect to find this kind of alignment?

Most companies in most economies in most places live by sustaining innovation, not disruption. Successful investments are typically medium-to-low risk with medium-to-high rewards. They do not involve going through a bet-the-company J-curve, that deep and harrowing financial trough from which only a fraction of traveler’s return. Financiers from traditional economies do not want the companies they invest in to take this route—they want steadier ROIs from more proven paths. The executive teams who run these companies developed their considerable expertise prosecuting opportunities of just this sort. The workforce’s who report in to them are not prepared to work crazy-long hours in pursuit of some visionary dream, nor do they want them to. They want them to show up, be present, do real work, and then go home and spend time with their families, loved ones, and significant others. That’s what economic stability is all about.

So, when a disruptive innovation does cross the chasm and breaches the defenses of one of their mainstream marketplaces, it should come to no one’s surprise that it is not being led by any currently successful established competitor. Frankly, such organizations all have better fish to fry. BUT, once a disruption has breached the mainstream market’s defenses and taken hold, then the game is dramatically changed. The old way is now under existential threat, the established ecosystem is no longer economically viable, and customers are looking to their traditional vendors to see if they can and will adopt the new playbook.

Now, the good news here is that customers do not like to switch vendors. This means, if you and your ecosystem of partners can stand down from your old positions of power and take up the new modus operandi, then your prospects of defending your turf are actually quite good. You don’t have to introduce a disruptive new business model of your own to do this, but you do have to catch up—and smartly too! This means you have to incorporate enough of the new technology to modernize your operating model, to blunt the appeal of the disruptor by stealing a bit of their thunder. That is, your goal is not to differentiate in order to win new customers—that’s the disruptor’s playbook. They want the customers you have. Your goal instead is to neutralize the opposition’s appeal in order to keep your existing customers loyal to you. Differentiation and neutralization call for two very different playbooks. Silicon Valley is the master of the first. You need the second.

For that, you should look outside the Valley to a company like Microsoft, one that has spent the entire arc of its history protecting the extraordinary customer base it was gifted by the near-universal adoption of the IBM PC. Without exception its most successful products were born out of neutralization, not differentiation. That is, Windows neutralized the Macintosh OS, Windows NT neutralized Novell, Office neutralized WordPerfect, Lotus 1-2-3, and Persuasion, Outlook neutralized cc:Mail, SQL Server neutralized IBM DB2 and Oracle, and Internet Explorer neutralized Netscape Navigator. In every case, Microsoft was quick to clone just to get something vaguely competitive into the market asap, and then worked relentlessly first to bring its product up to speed and eventually to surpass the original disruptor. And all along the way, it leveraged its existing market position to bundle early offerings in for free, monetizing them downstream either on their own or by virtue of them sustaining the price premium of the suites they had been incorporated into.

By contrast, Silicon Valley companies that have found themselves under a comparable attack have often tried a different tack. They have sought to out-innovate the innovator, to leapfrog the freakin’ toad that just leapfrogged them! Yahoo wanted to out-innovate Google with social search. Sun and HP wanted to out-innovate Intel with Spark and PA-RISC. eBay wanted to out-innovate Amazon by buying Skype. But when the barbarians are at the gates, there is no time to invent a new weapon or experiment with an unproven one—you have to co-opt the one they are using against you.

So, yes, please do come to Silicon Valley and take away whatever lessons you can incorporate successfully into your current enterprise. Everyone needs to differentiate eventually. But you might extend your trip up to Redmond to learn a trick or two from the folks up there as well.

That’s what I think. What do you think?





People First

Executive Development: We Need Our Next Generation of General Managers Now!

Geoff Moore

People First is delighted to share work that is relevant to our initiatives. Geoffrey Moore is an author, speaker and management strategy advisor. His work has influenced the careers of many of us at People First and we are excited he granted us permission to share this particular article.

In this second article that Geoff has agreed to share through People First, it was “The ‘T’ for Talent” model caught our eye. While we in People First are not fans of the word “talent”, we recognize that corporations need to find the best and brightest people to spur them onto success. Geoff highlights the need as succinctly as ever.

This article on leadership and management was published on LinkedIn, August 10, 2017.

As technological innovation continues to disrupt industry after industry in waves of what Joseph Schumpeter taught us to call “creative destruction,” executive decision-making is being driven down in the organizational hierarchy, closer to the customer, nearer to the action. This in turn is putting pressure on the HR function to deliver programs to develop executive talent faster and better than ever before. They are going to need help.

All development programs are intended to change state, so as good program designers, it behooves us to answer two questions at the outset:

  1. What is the current state a candidate needs to have achieved to qualify for entrance into the program?
  2. What is the future state a candidate needs to achieve in order to graduate?

Here is a template for getting started:


The Future of Work

Artist Jorge Otero Escobar weaving Lomo (Backbone) in 2015

I just read a blog post, The Future of Work – Redux by John Philpin. It provides a nice, short look at what might happen as computers, robots and artificial intelligence become increasingly present in the workplace—what will people do when “all the work is done by robots?” As a result, I will be using computer, robots and AI interchangeably for the rest of this post.

John expresses a view that the future includes people working with robots, not simply people being replaced by robots. I happen to agree with that. I’ve written several blog posts on artificial intelligence (AI) and my skepticism about the capabilities and pace of the introduction of AI systems. AI has enormous potential, but I don’t see AI making humans obsolete any time soon (actually, I don’t see AI making humans obsolete—period).

Computers, and by extension, robots and AI, possess one important capability: they can add and subtract really friggin’ fast. George Boole developed what we now call Boolean Logic and it created an approach that allows us, following in the footsteps of Charles Babbage, Augusta Ada King-Noel Countess Lovelace (nee Byron), Grace Hopper and Claude Shannon, to stick those additions and subtractions together in such a way as to resolve any computable task (à la Alan Turing).

People First

People Last

You probably know that we publish articles to the People First Publication on Medium. We just published an article on politics and venture capital funding.

People First is not a politically driven group, but in modern America, it is increasingly hard to keep politics out of business as the two seem to get rammed against each other over and over again.

This article falls into three parts, the first referencing a politically oriented post, the second from a venture capitalist and the third my thoughts about the connection between the two.

Continue reading…

People First

Start Up Culture

Dan Lyons - Author Of 'Start Up Culture'

Dan Lyons shared a video about working in the new tech start-up bubble on his blog.

This made me smile…