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GP27Apr05: Don't Step in the Same River Twice A Slough of Despond. If you do step in the same river twice, you are probably putting your foot into a black hole of stagnation, something equivalent to the Love Canal. And you will come down with all sorts of skin diseases. Most likely, we should have given this advice in our last dictum on health, called “Dying with Your Boots On,” since so much of the good life springs from staying out of foul places. That includes polluted rivers and desperate, depressed states of mind. You Can’t Step in the Same River Twice.
Actually, our title is a permutation of Heraclitus’s famous quote: “You
could not step twice into the same river; for other waters are ever flowing
on to you.” So don’t try to go into the same river or over the same ground
twice. It makes you boring, and it’s usually impossible anyway. (See
www.quotationspage. The First Existentialist. Heraclitus, by the way, was the first existentialist, even if his nineteenth- and twentieth-century emulators thought they were inventing something new. If you plough through the spectrum of Greek philosophers, you will find that they pretty well covered the waterfront and that every modern strand of philosophy was anticipated by the boys in Athens and surrounding city states. We’ve just been adding refinements to their architecture ever since. In modern times, our task is to remix the ancient philosophical ingredients to deal with an altered world. The Company Philosopher. Years ago, a retiring chief executive told us what the boss can and can not delegate. Most everything can be given away to subordinates. But, he said, strategy, the grooming of key top managers, and communication with significant corporate audiences must be controlled in detail by the CEO. Implicit in this view is that the chief executive is, above all, the company’s chief philosopher and that he must infect both his company and his marketplaces with a coherent body of thought about his company’s reason for being as an antidote to our conceptually muddled times. The new CEO needs more grounding in the rudiments of philosophy, the like of which they never teach you at business school. We ourselves have pretty well bought into this way of thinking, and have been at pains to get our clientele to give away many of the chores that don’t pertain to the 3 areas he chose for personal attention. The Meaningful Company. More difficult, perhaps, is the decision as to what a company has to do inhouse and what it can “outsource,” which is the euphemism used for the last 20 years by those who want to buy everything on the cheap on the outside with the ultimate goal of becoming a “virtual” corporation, ideally with one employee. What can you do outside your walls and not lose your meaning and vitality? As we have hinted already, this decision requires philosophical clarity that goes beyond mere commercial horsesense. Core Competencies. Circa 1990, Gary Hamel and C.K. Prahalad essayed about “core competencies.” These are the key strengths of a company which you enhance and do nothing to impair. In theory, a CEO should ensure that he doesn’t give away any function that would vitiate them. But that’s theory. (See http://en.wikipedia.org/wiki/Core_competency.) What’s happened since, of course, is that companies have been lopping off cost after cost to stay afloat and to temporarily bolster their stock prices and executive compensation. The bosses have generally figured out how to narrowly redefine “core competencies” to permit cutting to the core and beyond. So much for 1990s end-of-the-century thinking. We suspect companies are giving away the store, as they cut costs and narrow their focus. The alarm bells went off when we spied a recent issue of Business Week (March 21, 2005), the cover of which blurted out “Outsourcing Innovation.” An editorial at the back of the magazine—this must be the magazine’s most unread section—warns: “Globalization is moving so fast that now even the knowledge economy is being redistributed around the world. A whole new set of winners and losers will appear in the years ahead. Corporations and the nation have work to do if they are not going to be left behind.” You don’t have to read this rambling article, however, to know we have stepped in a cesspool or some equine elimination. Anything about “innovation” is about as core as you can get, and you don’t outsource it. The thinning down that’s been going on has surely become suicidal, corporate anorexia packaged as a glorious makeover. Outsource Yesterday, Clutch Tomorrow to Your Breast. If “core competencies” is, in fact, a squishy concept that morphs on demand, we must work a little harder to say what goes, what stays. We would counsel any company anywhere to throw today and yesterday off the back of the boat, allowing subcontractors galore a crack at doing known, routine, yes-we-know-how-to-do-that tasks. But tomorrow is never delegated. And, by tomorrow, we mean “invention” and “branding,” about which we have said so much in previous letters. Invention. It’s innovation, and R & D, and a lot of things. Essentially it is the process of coming up with (a) new products and services, (b) new ways and processes of doing everything we do, and (c) new definitions of our company that lop off what’s become vestigial and add capacities that will make us flourish. Invention is everything we aren’t but want to be, don’t know how to be, and plays to our innate sense that “there’s gotta be a better way.” We now live in an age of conspicuous conservatism in
which, ironically enough, we are unwinding institutions and ingrained
patterns, all in the name of recapturing some mythical past. This
conservative epoch is an age of consolidation (of yesterday), and, as such,
it does not foster much in the way of invention. Schumpter would call this
a period of “creative destruction,” although those of a conservative frame
of mind would like to think they are preserving, not destroying. For more
on Schumpter, see our
Big Ideas,
http://en.wikipedia. All The Rage. In business and government today, “creative destruction” is foot loose and fancy free, but it is mowing down companies, institutions, cultures, and traditions at a dizzying rate. AT&T, Union Carbide, International Harvester, the old Bank of America, and a host of other giants are no more. This disintegration is preparing the stage for tomorrow. But for those who can look beyond it, to 2020 or so, the task is not to destroy, but to invent. It is this spirit of invention that we hope Sir Howard Stringer will not diminish at Sony, the maker, for instance, of one of the very few laptops in the world which does not crash and burn with frightful regularity. As he bangs heads together and cuts costs, he could lose sight of the company’s creative destiny, an unfortunate metamorphosis that has long since happened at Hewlett-Packard, once one of America’s premier inventive companies. UnWired World. Lest you think there is nothing under the sun that still needs inventing, simply turn on your cell phone. Good basic cell phone service does not exist in the United States, and several countries have stolen a march on us on both the content and capability fronts. Your phone is too hard to use (mimicking the same user unfriendliness we attribute to computers), offers spotty service with horrendous gaps in reception as you move around these United States, and costs approximately twice what it should if market forces were really working. The Federal Communications Commission has never given the long-proven concept of “universal phone service” a thought when it comes to mobile phones. There is nothing about which our readership complains more than cell phones, not even their crummy cable services. Widespread mobile is only 25 years old, and it needs to be entirely re-invented, from top to bottom. Despite all out cell phones and laptops, we’re still not that well linked together. Branding. Hundreds have written us to echo our warning that America’s companies are debranding themselves and their products at a rapid rate—with perilous consequence. (See “Debranding”; “The World According to Dunk” in Metro, July 2000; and “Unbranding Next? The Rise of the Unlikely.”) Branding—the communication of your essence to everyone from your employees to your customers and even to your competitors—is part and parcel of the organic development of any company. Neglect it, and you will perish. If a tree falls in the forest, and nobody hears it, it never fell. If a company does great things, but nobody knows its name, then it does not exist. Invention and branding are states of mind that overcome corporate inertia and drive momentum into the enterprise. There was an odd contradiction about branding, as practiced in the twentieth century and throughout the whole history of mass manufacturing. Companies with brands—from Proctor and Gamble to General Motors—wanted to pretend they were turning out something wonderful for you and you alone even though that something was meant to be exactly alike millions of other xerox copies they were churning out for the marketplace. But no two things are exactly alike. In fact, we learned from Heraclitus that we can’t step in the same river twice, so let’s not pretend your soap bar or my jalopy are the same. Somehow the twentieth-century product was suppose to be special, yet it was intended to be like millions of others, and yet no two things are alike anyway. Vive La Difference. True Branding would celebrate the difference between my car and yours, my steak tartare and yours. It is the enemy of carbon copies. And, if implemented, it is the friend of advanced economies which cannot compete with the manufacturing costs of the developing world, but which can add economic value through relentless individuality. That is, economics and technology now permit us to produce absolute one-offs, of which there are no copies. One of a kinds. That exaggerate the differences between my experiences and yours. Brands of one. We know of a Buick Roadmaster 1996 that is like no other. In fact, General Motors cars generally are not very much alike, because its managers generally foul up the details, and so there is tremendous variance between each vehicle. But this 96 (the last year GM built Roadmasters) has character that ranges well beyond GM’s freaky variation. Intentional differences. It bears a moniker, and we know its number—60082—and that it was completed at the Arlington Texas Plant on March 4, 1996. Amongst the workers who had a hand in it were Tim “Catfish” Bailey, “Ack” Darby, and Loy “Goose” Preston. The car has Chevy Impala wheels, providing a much smoother ride, even though the Buick people were not up to making this simple, sensible change. Other adaptations are coming—a better computer chip inside, different detailing on the outside—since continuous improvement can flourish in an age where it’s possible to have one of a kind. It makes sense to encourage intentional differences, and parts of the auto industry are already moving in that direction. Branding, we would claim, has never been so important, especially to high cost economies. But it’s much changed in an age where the customer can more truly begin to have the product his way and when the customer either does not believe or does not even hear the claims companies make in old-fashioned advertising and outmoded merchandising. In fact, the customer of companies of the future truly participates in creating and re-creating the brand. A different kind of branding is now imperative. P.S. As we have mentioned in several letters, many smaller, out-of-the-way countries are inventing and nurturing genuinely new ideas, because they are not undergoing the consolidation and “creative destruction” endemic in the major economies of the world. They do not have as much that needs to be wiped away. For more on inventive countries, see “Falling off the Map” and “In Search of Governing Ideas.” |
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