On Corporate Arrogance
I was saddened this week as I read the coverage of Motorola’s line of Android based smart phones. As many of you know I left Motorola in the mid 90’s at the height of its cell phone and pager dominance because (and I swear this is true) the President of Motorola told our product team that “nobody will ever want to watch choppy video in 3 inch windows on their computers”. I was very bitter when Real Networks went public and pretty much “Apocalyptic” when Google bought YouTube. (So much for not carrying grudges.) Yet, I have great fondness for Motorola, they had excellent management philosophies, a love of smart technical minds and a fraternal culture that made you proud to work there. I never pursued an MBA because Motorola all but gave me a degree with extensive training, implemented best practices and access to great minds.
This week reminded me what happens to market leaders when they are unwilling to cannibalize their own products and force product evolution. I remember having brutal disagreements with Motorola senior executives as they dismissed RIM and Nokia as serious competitors and took a Henry Ford approach to selection, options and feature development. So this week they introduced a very strong line of smart phones into the market they once dominated with little fanfare, poor distribution and some earned skepticism. Blackberry has a huge installed base of North American business users, Apple has the finest consumer experience for entertainment and the best application store in mobile and Nokia has a huge global installed base of smart phone devices but struggles in the U.S., plus Palm has quadrupled their stock price with the high expectations for the Pre devices and new software platform.
So how do we prevent making the same mistakes that lead Motorola to lose leadership positions in not 1 but 2 multi-billion dollar categories?
1. Understand the competition completely. True competitive analysis is a culture not an exercise with a deliverable. Examine the new product pipeline weekly, include small market share players (Sidekick anyone?) and constantly ping users for unbiased opinions. (I recommend customer panels to all of our clients, BtoB or BtoC)
2. Don’t be afraid to shorten a product lifecycle even if you leave money on the table. Bill Walsh the famous 49er coach let Joe Montana, Todd Rathman and Ronnie Lott leave the team even though they had a couple of good years left. He felt it was better to let go of a great player too soon instead of too late. The same is true of products and services. Many publishers are facing the question of when to close print publications and transfer all of their sales efforts to online and digital programs. In some cases it means significant revenue loss that cannot be replaced for a couple of years. I would argue that if print is not making money and is not directly related to supporting ancillary revenue streams, it is better to begin the painful transaction earlier than later.
3. Don’t leave major gaps in your product line. Look at the recent success of the Flip portable video cameras. Canon, Kodak, Sony and Casio all have great products but in comes a small nice player who captures a sub $200.00 price point for video and the competition is caught flat footed. The major players kept trying to maintain higher price points with additional features instead of embracing a large segment of the market who just wanted something “good enough”.
4. Rapidly replace bad products. For all the flack that Microsoft takes for lack of innovation and bully tactics, they do recognize mistakes and rapidly respond to product failures. Windows Vista has been a big disappointment but Microsoft has rapidly accelerated the introduction of Windows 7 in an effort to minimize the damage. They did the same thing with the dreadful Windows Me and will be killing the clunky Entourage in the next version of Office for the Mac.
5. Have customers handle the testing and QA process. Some of the best QA data and features feedback we have ever received has been directly from front line users of our web sites. This was also true of our product development teams at Acer. Having customers serve as “official” development team members usually guarantees that your offerings have a better chance of gaining traction.
Tell me your thoughts…….