What's Your Company's DNA?
Hello, and welcome to the Edge Economy blog. Fasten your seatbelt--we’re going to be delving into the heart of strategy and advantage, diving into questions like "What are tomorrow’s great
arenas of competition? How is the essence of advantage changing? Where do new approaches to strategy begin – and why do they work?"
These questions began gnawing away at me during my MBA at London Business School – and so I kept asking them, until I found myself doing research with Gary Hamel. They continued to consume me during my postgraduate work at Oxford, where I found that answering them required rethinking many of the economic assumptions orthodox strategy takes for granted.
I’ve been privileged to help forward-thinking boardrooms, visionary investors, and revolutionary startups grapple with the challenges and opportunities of next-generation strategy for the last five years – first as Principal of my own advisory boutique, Bubblegeneration, and now as Director of the Havas Media Lab.
Questions like those above are vital for a very simple reason: strategy ain’t what it used to be. Yesterday’s most powerful sources of advantage, and the strategies built atop them, are less and less powerful, less and less durable, and more and more costly.
Starbucks, for example, pursued a textbook approach to strategy; growing from a strong core defended by a powerful brand, value chain control, and scale, into adjacent markets, like food, music, and events. All of which led it directly and deeply into strategy decay – by robbing it of purpose, vision, and empathy.
Microsoft, perhaps the ultimate hardball player, focused on ownership of a standard at all costs – and is now struggling to compete in an industry whose fabric has been riven by open standards and open code: its own domination games have returned, like the ghost of strategy past, to haunt it.
Starbucks and Microsoft are just two small examples of advantage failing firms. But the failure of orthodox strategy is increasingly being felt across the economy, and in larger ways.
We’re stuck in an energy crisis. Is it partly because orthodox strategy prescribed that Detroit should limit competition, stifle innovation and destroy collaboration, and focus, instead, on developing and push-marketing gas guzzlers? We’re increasingly obese and unhealthy. Is it partly because orthodox strategy prescribed that the food industry should focus on scale economies in marketing, distribution, and most perniciously, the quality of ingredients?
In my advisory work, we often begin by looking at examples like these – companies in decay. The next step is to understand who’s different – because, in almost every industry, there are players who have struggled with – and succeeded in – rethinking strategy and advantage.
Google and Myspace are perhaps the most obvious; Craigslist and Wikipedia the most radical; and Zara perhaps the least well understood. What all of these players have in common is that, as embryonic revolutionaries growing up in an era of turbulence, they’ve developed radically different DNA.
And it’s there – deep in the DNA of the firm – that strategy and advantage are being forged anew. New DNA – new ways to manage and organize production and consumption – lets today’s new market leaders perceive, think, judge, and execute (vastly) more efficiently, effectively, and productively than the norm, leading directly to new sources of advantage.
In subsequent posts, we’re going to discuss the new DNA and new approaches to strategy players like these are pioneering – and what firms as disparate as P&G, IBM, Toyota, and Nike are learning from them about the changing nature of advantage.
Discussion here, as in my advisory sessions, is key: it’s your comments and contributions that can ignite, shape, and sharpen new insights for all of us.
So let’s start by discussing some general questions. What do you think next-gen strategies look and feel like? Can you name a company that’s a good example? What’s different about them – what’s their advantage built on?
That way, in my next post – when I’ll try and explain why yesterday’s sources of advantage are beginning to fail – we’ll have a richer conversation about who’s been ahead of the curve.
| Reader Comment & Author Reply | |
Reader Rao Kachibhotla's Comment: Author's choice of companies with "failing strategies" is interesting. These companies are even described as companies in decay. For example, Microsoft is fighting Google, which gives its search strategy a failing grade, not the whole company.
For that matter, how about Google? Google is doing all the things Microsoft once did (namely moving into adjacent markets like Docs etc..). So, a few years down the line, do you think we would recognize Google, the search company. So, here is my theory. Speaking of DNA, consider the life cycle of companies. No matter how good they are, they have a life span. If companies like IBM or GE "reinvent" themselves once every 30 years, they are "re-incarnating" themselves (they are no longer same business model, same customer base and same value proposition). So, how can Microsoft succeed against Google? They can do that *only* when they can come up with better reason for people like me to use live.com instead of Google (which obviously solves the problem of bringing more advertisers to the "network"). I thought Bill Gates had it right when he said that next frontier of search war is to "pre-search" as againt me going crazy over pages and pages of search results. Uh, I have not seen anything from microsoft in that direction. Now, that's lack of strategy. |
These questions began gnawing away at me during my MBA at London Business School – and so I kept asking them, until I found myself doing research with Gary Hamel. They continued to consume me during my postgraduate work at Oxford, where I found that answering them required rethinking many of the economic assumptions orthodox strategy takes for granted.
I’ve been privileged to help forward-thinking boardrooms, visionary investors, and revolutionary startups grapple with the challenges and opportunities of next-generation strategy for the last five years – first as Principal of my own advisory boutique, Bubblegeneration, and now as Director of the Havas Media Lab.
Questions like those above are vital for a very simple reason: strategy ain’t what it used to be. Yesterday’s most powerful sources of advantage, and the strategies built atop them, are less and less powerful, less and less durable, and more and more costly.
Starbucks, for example, pursued a textbook approach to strategy; growing from a strong core defended by a powerful brand, value chain control, and scale, into adjacent markets, like food, music, and events. All of which led it directly and deeply into strategy decay – by robbing it of purpose, vision, and empathy.
Microsoft, perhaps the ultimate hardball player, focused on ownership of a standard at all costs – and is now struggling to compete in an industry whose fabric has been riven by open standards and open code: its own domination games have returned, like the ghost of strategy past, to haunt it.
Starbucks and Microsoft are just two small examples of advantage failing firms. But the failure of orthodox strategy is increasingly being felt across the economy, and in larger ways.
We’re stuck in an energy crisis. Is it partly because orthodox strategy prescribed that Detroit should limit competition, stifle innovation and destroy collaboration, and focus, instead, on developing and push-marketing gas guzzlers? We’re increasingly obese and unhealthy. Is it partly because orthodox strategy prescribed that the food industry should focus on scale economies in marketing, distribution, and most perniciously, the quality of ingredients?
In my advisory work, we often begin by looking at examples like these – companies in decay. The next step is to understand who’s different – because, in almost every industry, there are players who have struggled with – and succeeded in – rethinking strategy and advantage.
Google and Myspace are perhaps the most obvious; Craigslist and Wikipedia the most radical; and Zara perhaps the least well understood. What all of these players have in common is that, as embryonic revolutionaries growing up in an era of turbulence, they’ve developed radically different DNA.
And it’s there – deep in the DNA of the firm – that strategy and advantage are being forged anew. New DNA – new ways to manage and organize production and consumption – lets today’s new market leaders perceive, think, judge, and execute (vastly) more efficiently, effectively, and productively than the norm, leading directly to new sources of advantage.
In subsequent posts, we’re going to discuss the new DNA and new approaches to strategy players like these are pioneering – and what firms as disparate as P&G, IBM, Toyota, and Nike are learning from them about the changing nature of advantage.
Discussion here, as in my advisory sessions, is key: it’s your comments and contributions that can ignite, shape, and sharpen new insights for all of us.
So let’s start by discussing some general questions. What do you think next-gen strategies look and feel like? Can you name a company that’s a good example? What’s different about them – what’s their advantage built on?
That way, in my next post – when I’ll try and explain why yesterday’s sources of advantage are beginning to fail – we’ll have a richer conversation about who’s been ahead of the curve.
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Umair Haque is Director of the Havas Media Lab, a new kind of strategic advisor that helps investors, entrepreneurs, and firms experiment with, craft, and drive radical management, business model, and strategic innovation.
Comments
Author's choice of companies with "failing strategies" is interesting. These companies are even described as companies in decay. For example, Microsoft is fighting Google, which gives its search strategy a failing grade, not the whole company. its business apps, server apps are growing nicely, and its desktop dominance is inplace for next few years. Microsoft in decay seems like a broadbrush to me.
For that matter, how about Google? Google is doing all the things Microsoft once did (namely moving into adjacent markets like Docs etc..). So, a few years down the line, do you think we would recognize Google, the search company.
So, here is my theory. Speaking of DNA, consider the life cycle of companies. No matter how good they are, they have a life span. If companies like IBM or GE "reinvent" themselves once every 30 years, they are "re-incarnating" themselves (they are no longer same business model, same customer base and same value proposition).
So, how can Microsoft succeed against Google? They can do that *only* when they can come up with better reason for people like me to use live.com instead of Google (which obviously solves the problem of bringing more advertisers to the "network"). I thought Bill Gates had it right when he said that next frontier of search war is to "pre-search" as againt me going crazy over pages and pages of search results. Uh, I have not seen anything from microsoft in that direction. Now, that's lack of strategy.
- Posted by Rao Kachibhotla
February 6, 2008 10:14 PM
Umair,
The article is very interesting and makes one think what do I need to do without hampering my current business drive to new paradigm change. I think everyone in the industry and in corporate world would like to change, if the person would like to survive or has some aspirations to move up( provided he is not in dead bed) or make the company bigger or has some competition, but the biggest dilemma is how?. It is very true that companies have to re shape their strategy with time based on market dynamic and few of them has done in very minute way.. GE sold non performing companies, Dell switched of some product lines so on. But that does not make any change in DNA. It more like few shots of Botox, trying to make the company look good and re focus( Which is fine.. good ), Its has nothing to do with DNA. The challenge i feel is keeping the current engine going and then try and leap frog to a new era.
Yes it is possible if one spins off a group to drive new business it can be done, But pls note , that is totally new DNA. Google and new generation companies come into the market much later Microsoft, intel, so these new organizations are starting fresh and have new set of ideas and it is much easier for new companies to approach news ways when they do not have any baggage to carry with them. Few companies took a large beating in the process to reshape like HP when merged with Compaq, but it took 5 years before they could reap the benefits. At one point the market even predicted, HP PC will be sold and HP should only sell printers? It always easier to start with clean slate and set of idea? I would like to see 10 years down the line how Google reacts to new competition! Yes, if you are cash rich you can buy the new one, but that is not easy at every step of the way..
Every aspect of change is driven by hurdles and these I feel are few inherent bottleneck:
1) Time
2) Organizational internal structure
3) People and mindset
4) Infrastructure and baggage of old way of doing things
5) Share holder pressure- which has the short term impact for any change
6) If the technology curve and entry and exit barriers are low
7) Emotional attachments and pride factor
8) Drive radical change keeping the current rate of growth on track
I am keen to hear from you your views on this…
- Posted by Oni
February 7, 2008 12:57 PM
To me, one of the issues here is figuring what mode of organization can create and capture economic value and still function within the bounds of normal interpersonal social relations. What I mean is that, by definition, firms/corporations are inherently sociopathic.
Is it only up to a founder or Board to maintain deep social responsibility/accountability? Is the Google IPO prospectus "disclaimer" a model that future firms should look to?
I think the answer is yes to both previous questions but I'm curious about what Umair thinks about DNA at a high level, especially vis-a-vis the Google prospectus.
Also, Umair....as a long time Bubblegeneration cult member, congratulations on the new digs, I'm looking forward to more religion in the future ;-)
- Posted by Ethan Bauley
February 7, 2008 3:16 PM
Umair,
Great post to kick off the discussion.
While I intuitively see your idea, one thing that does nag me is that the sample size of firms with decayed strategies is too small and too specialized. For every Starbucks or Microsoft, there are many Macdonalds or IBMs that seem to be doing just fine by following conventional strategies. Of course, I understand that large fundamental shifts in economics take a long time before they show up on the main street. But as of now, there is a risk that you may be arguing by pointing at exceptions rather than the norm.
What's not clear to me is whether the likes of Google and Zara are fundamentally different or whether they are just applying the same old principles but in a more innovative fashion. For example, Google's move to grab wireless spectrum and open it up for free access is straight out of the textbook : commoditizing complements to shift value away from them to your own product.
An interesting idea may be to look at which companies are not yet in strategy decay but are on a path to that phase - and see if you can come up with any predictive, testable hypotheses.
- Posted by Mahashunaym
February 7, 2008 3:26 PM
Hi Umair,
Interesting - DNA is certainly a core aspect of any organization. It's what guides action in the spaces between plans and is core of what defines the organization. It's the ultimate agreement that brings forth the organization --- more of an unfolding. I see decay happening when organizations start to fold in on themselves and strangle the spaces for things to emerge. That happening is related to DNA but not entirely determined by DNA. It's more like the DNA is being strangled.
The latest articulation of my thinking in relation to this is here: http://www.flickr.com/photos/michaellewkowitz/2247912561/
Looking forward to your further posts!
- Posted by Michael A. B. Lewkowitz
February 7, 2008 4:31 PM
do you think repairing your arm will help your heart disease?
only peripherally.
the entire system is lacking in dna for both change and long term stability (those two are equivalent now), from the fed to wall street to analysts to companies ... the very dna determining what is value is corrupted to the point of death.
some basics, selfishness will kill you in a change (or edge) economy. localization is a blessing if you distribute products (think $12 a gallon petrol, and walmart's business model, a curse in thinking or hiring in information distribution. advertising as a revenue source will not be dependable, for the simple reason that my attention (and where it goes) is more valuable to me than your making money is valuable to me.
no business should be created to last more than just a few seasons, because the effort to maintain takes away from the effort needed to evolve. this is going to play hell with the way investing is done, but that is a subset of the fact that selfishness cannot work anymore, even for investors
nature has a system that is fully unified and totally self-adjusting. this is the model for future businesses, and nature includes consciousness, so how consciousness works is necessary to understand.
your board needs a yogi
- Posted by gregory
February 8, 2008 1:54 AM
In my experience, innovation is ALWAYS driven by a few RARE individuals who 'see' a new product or service, and then pursue that idea relentlessly. (Yes, this is also true for 3M etc.)
That's why there have neve beeen so many small start-up's (facilitated by the Internet and the myriad of services it offers to keep your overhead down, while enjoying similar capabilities as large companies). The key is recognizing / valueing / liberating these individuals within (or outside) your company.
Slapping the label 'DNA'on a company's culture / way of doing business may create an attractive article header, but it explains nothing - especially as the samples are chosen so haphazardly. After the fact, everybody can recognize a winner (or looser)...
I work in a large corporation, which has (once again) embarked on a large innovation initiative.
The first thing it starts with, is setting up an office for innovation, building a complex, large governance strcuture, creating definitions about innovation, and starting from very generic statements, and only 1 concrete goal (yes, you guessed it, double revenue by 20xx). So much for uniqueness...
- Posted by Ron
February 8, 2008 3:46 AM
In answer to your question on examples of cutting-edge strategies, and why they are so:
YouTube: their advantage is built deeply within the fact that they have revolutionized the experience of media consumption/production - true value is generated within such an experience (it's not about the videos) + the fact that that experience can be shared beyond, and is not limited to, the YouTube site.
Compare that experience to that offered by MTV or the many many similar "old" models.
- Posted by Alberto Nardelli
February 8, 2008 5:36 AM
I don't know if Wikipedia is such a great example, sure it is a great success so far - but there is decay going on in the hart of it: http://blog.p2pfoundation.net/wikipedia-governance-the-power-of-admins/2008/02/06
This overarching censorship and eradication of any critical thinking looks rather nightmarish.
- Posted by Zbigniew Lukasiak
February 8, 2008 5:38 AM
The one company that we discussed when we met that represents an interesting new model...albeit small but growing quickly...is Threadless with what you described as having a "sliceholder" model. Designers submit their work and the marketplace votes on designs. The winning designers earn a "slice" of what the market likes. The company and its shareholders get a return, the designer gets a "slice" of the results of their product and the market gets what it likes. This model has to apply in other places as you said.
- Posted by Bill
February 8, 2008 11:35 AM
Umair,
An excellent topic. Hopefully this will lead to an in-depth discussion where we can define the exact components of this DNA. Maybe company DNA equals: vision + mission + management + competence + strategy + culture. Add to this a large infusion of quarter-to-quarter shareholder DNA if the company is public. Some cases of "conflicted DNA" come to mind.
Can a company on the skids possess a latent DNA, or a potential DNA? Apple was a mess in the mid 1990's, failing on multiple fronts, with a DNA that had seemingly unraveled. Enter Steve Jobs, and Apple began a dramatic turnaround toward the innovative powerhouse it is today. Did Jobs inject a more potent DNA into Apple, or was he a better manager of the DNA already there (which included Jonathan Ive)? Perhaps he "freed" the DNA that previous management had repressed.
I also wonder if maybe customers can sometimes have more of a company's DNA than the company itself. Apple loyalists (mostly designers and media types) supported the brand with innovative uses and products when Cupertino management ran out of ideas in the 1990's. Harley riders did the same for Harley Davidson. As a business, could I create a distributed DNA with my customers, based on collaborative innovation? That might be a potent combination. And fun, too.
- Posted by Brian Phipps
February 8, 2008 12:00 PM
Great post. I look forward to joining the discussion.
Strategies that would be interesting to explore further (imho):
Disruptive business model innovations that are driving "real" positive social change and simultaneously "real" profits - Grameen Bank for example
Strategic differentiators and advantages: company's social benefits drive the economic benefits, direct participation and co-creation with customers and other businesses
How can these advantages and strategies be applied to other types of businesses.
Thoughts?
- Posted by Rod
February 9, 2008 6:27 PM
Umair's question is:
"What do you think next-gen strategies look and feel like? Can you name a company that’s a good example? What’s different about them – what’s their advantage built on?"
I think next-gen strategies look and feel almost, for lack of a better term, "touchy feely," at least compared to old-economy strategies. The successful companies of the future won't "sell" things, as much as they will solve economic problems and thus create value for the customer. Sometimes those two things are the same, but often times they aren't. This will be reflected by strategies that incorporate openness, trust and value-creation.
Right now, the companies that best exemplify these ideas are probably Craigslist and Google. When making decisions, they don't think "how much money can I make from this," they think "does this solve a problem that our customers have, or add value to their lives?" This is a pretty fundamental shift in thinking.
To me, the essential difference between the past and the future--and the source of the advantage of next-gen strategies--is value creation versus value extraction. In a world with the transaction cost of information reaching zero and commodification of many products and services, the question becomes--where do companies differentiate each other? How do they compete? I think they compete in two ways:
-Creating value for the customer (as opposed to extracting value from the customer)
-Credibility and trust
The companies that best solve a real economic need (and thus create value), and the companies that act, essentially, as the nicest and most honest, will do the best (assuming a ceteras parabus situation in terms of products, services, technology, etc, etc).
These are two things that can't be mass produced or commodified or faked. Either you create value or you don't. Either you treat people well and have integrity or you don't. Companies that do those things will be in a big position of advantage over those that don't--witness the success of the previously mentioned Craigslist and Google.
- Posted by Tucker Max
February 9, 2008 8:46 PM
MSFT continues to grow its business(es) to the tune of billions each year. How that translates into decay mystifies me...
- Posted by Venture capital
February 10, 2008 2:19 PM
I am a techie and hence my views are fairly naive here.
> What do you think next-gen strategies look and feel like?
I think the look and feel would be more solution centric than product centric to begin with.Then there will be differntiators like a lot more value per unit price than before. Also any next gen strategy essentially have to raise the current table stakes (you always up the ante by giving what other people in the market are thinking of value and hence charging for it).
>Can you name a company that’s a good example?
take www.snap.com as an example (since you mentioned google or esle I was going to mention other companies).They are also in search space and ads,etc
>What’s different about them –
Instead of pay-per-view or pay-per-click, you only pay for ads that directly resulted in a purchase. Thats really neat because you know you are paying for results.
>what’s their advantage built on?
Advantage is built on the fact that they essenitally fast forwarded a few years to see how the evolution of ad space affects publishers and advertisers and went to address the heart of the problem.(I would only pay for ads that translated directly into a measurable revenue). Not only that, they give away adjacent functionality snapshots (shots.snap.com) for free which enables their brand awareness while giving them interesting foothold technically.
- Posted by Paddy
February 10, 2008 3:53 PM
Patagonia strikes me as a company with very different DNA. They grow and innovate according to their own internal needs and desires. They cultivate a familial atmosphere among their employees by offering flex time if the surf is good, and by offering full time day care for moms among many other non traditional practices. They innovate according to what they want and believe in by recycling their old clothes and helping to found "1% for the planet" (giving 1% of sales to the environment).
They could have sold out to a larger apparel company or gone public...both of which would have changed their core DNA and the company would have begun the inevitable slide to decay.
Another company with unique DNA is Gore (makers of Gore-Tex). They've made a beautifully sustainable company without business tiles, bosses, and corner offices. And this is just a small example of how they do things differently.
Google's DNA is different than most but being a public company makes it harder to maintain and strengthen one's own unique DNA.
Look forward to your next posting.
- Posted by john
February 10, 2008 4:53 PM
The companies that best solve a real economic need (and thus create value), and the companies that act, essentially, as the nicest and most honest, will do the best (assuming a ceteras parabus situation in terms of products, services, technology, etc, etc). Hence a company has been failed fusion and complex in the environment. Solving is simple: new strategies but also new temporary organization modals. Whereas are dynamic, agile competitors. And for efficiently and responsively competition require new view, new paradigm. Sincerely.
- Posted by Hüseyin YILMAZ
February 11, 2008 4:24 AM
Flat organizations enlisting servant leaders concerned with principles and values where money/profit isn't the north star, true global peers, listing sentience within business rhetoric, values over skills, and many other things which exist in a land where "MBA" and "VC" are ever increasingly synonymous with "EPIC FAIL"...
- Posted by Jason
February 11, 2008 4:32 AM
Umair's question is:
"What do you think next-gen strategies look and feel like? Can you name a company that’s a good example? What’s different about them – what’s their advantage built on?"
To me, next gen stratgies will be more focused on delivering a dramatic leap in value to consumers and having therefore all the competitors "offside" rather than taking tactical steps that only depend upon other companies stands.
These strategies will be built on a strategic capability : being able to question the implicit and explicit rules that shape an industry and having the guts to break them. Changing the key success factors of a market can subsequently lead to a shift in the relative value of the competences : assets and competences that were previously underused become crucial in the new competitive game set by the company.
Nintendo's latest strategic moves are pretty good examples of this kind of strategies : they acknowledged they couldn't win in the current video games industry and managed to play according to their own rules. Done with the race to computing and graphics capacities and the huge R&D spent it implied! Iith its DS and WII, Nintendo chose to explore fields (simplicity, polysensorial games,...) and address maket segments (women, family,...) usually pushed aside by Sony and Microsoft.
- Posted by Pierre-Yves ¨Platini
February 11, 2008 4:50 AM
Agh! No full text in feed? You (or HBS) are now forcing me to come to the site to read what you have to say? Isn't that a bit ironic, given all that you write about?
- Posted by rick burnes
February 11, 2008 3:55 PM
Hi Umair,
I'm an avid reader of your Bubblegen blog and am glad to see you started a new adventure. Will follow you here as well and wish you all the best!
But what about your strategy regarding content syndication at this blog? Did I see it correctly in my feed reader that you publish an RSS feed with an introduction of the post only?
Would you consider that to be in line with one of your next-gen strategy mantras 'open beats closed'?
Please don't make it difficult fo me to join the conversation!
Thanks,
Ronald
- Posted by Ronald Carpentier
February 11, 2008 3:55 PM
A note on RSS feeds
We have received a number of questions regarding RSS feeds for Edge Economy, and while we are taking the time to respond directly to those of you leaving comments here asking about their availability, we thought it might be helpful for us also to leave a note here for all our savvy readers to benefit from.
The individual feed for Umair's blog can be accessed using the "Subscribe to the Umair Haque RSS Feed" link, just below the header, on the Edge Economy index page. This will lead you to a page where you can select the RSS XML feed among other formats and shortcuts.
Note however that there is a second way of subscribing to the feed for Umair's Edge Economy - with the auto-discover link that creates an icon in the location bar of your browser. The reason some of you were not seeing Umair's latest post in this second feed is because it is an aggregation of all our Discussion Leaders, and we are still in the process of updating the aggregator to include posts from Edge Economy. We are completing this today however, so, depending on aggregator delay times, it may take just an hour or two after this comment is live for the feed to be up-to-date with posts from Edge Economy.
Thank you again for joining us at Edge Economy, and we hope you'll contact us directly if you have any further questions or comments about RSS.
- Posted by Matt Wagner, Sr. Technical Producer, HarvardBusiness.org
February 11, 2008 5:02 PM
Matt,
I'd also like to have embed code for Umair's videos, if that can be managed.
- Posted by Brooks Jordan
February 11, 2008 10:22 PM
Umair's stuff is great, but it appears only partial RSS feeds are in effect right now. Are there full RSS feeds available? I only want to click to the root page if I'm going to leave a comment. Otherwise, that required click to get the content becomes nuisance.
Please let me know.
Max
- Posted by Max Kalehoff
February 12, 2008 3:29 PM
Hello all,
Brian Phipps hits on a couple of really key points in his comment of the 8th. First he hypothesizes correctly that a visionary keeper of the DNA and its mantra is key. It doesn't have to be a founder, but it at least needs to be his/her spiritual surrogate.
Steve Jobs and Apple were cited. Another, very current example would be Howard Schultz at Starbux, who just yesterday announced a plan take the extreme measure of shutting down stores so training in the delivery of brand experience could be done without interruption. Another example of note is Mark Parker at Nike, who rose within the ranks but was passed over initially for the top spot and attained it only after the company endured a dismal period of frustration with a CEO brought in from the outside.
These three share a slavish devotion to the disciplines of brand architecture. And that gets to the second great point that Brian brings up in this question: "I also wonder if maybe customers can sometimes have more of a company's DNA than the company itself."
If you rephrase the original question to include the DNA of not just the company, but the company's brand, then you get to the heart of consumer experience, and the potential for a company/consumer union to transcend a singular visionary leader.
Unfortunately, too few people realize or appreciate that a company's brand is not a logo, but a co-authored story, and that the bond formed is subconsciously more akin to wedding vows than the swapping of owner's manual for cash.
Oh, and congrats again Umair. Nice video, too. When do we get the one of you playing guitar and singing?
- Posted by Crawford
February 13, 2008 1:31 AM
Nice post Umair - the video comment follow-up was pleasantly entertaining. Congrats on moving to the new neighborhood.
I would like to second the vote for a full text feed. Since BGSL has always given so freely, I assume it's the management here that so desperately wanted me to click through to the site so I could see the lovely SAS and Acura ads instead of just delivering the post via RSS.
Full text feeds are a good way to unlock more value for the reader, instead of focusing on extracting value, you know...
- Posted by Todd McKinney
February 13, 2008 2:22 AM
Hi Umair -
Congratulations and look forward to discuss on future next Wednesdays ;-) I've got 2 points on your post:
I would propose to complement the DNA concept with a "Lean Mass" concept, to add the historic, leadership and dynamic dimensions more clearly. I develop here http://www.macroprinciples.com/2008/02/dna-and-lean-mass-new-business-concepts/ (note to editor: don't know if ok to post link here, please edit out if not, a trackback should arrive anyway) and would be very interested in your thoughts on this.
On your questions asking for example, I have 2 great ones: Dopplr and Tripit. In short, they both provide the same "closeness" features but:
- Tripit has a unique feature, providing a very real service and value
- Dopplr is better in terms of design, buzz and brand generation, and insertion in the "flow" of social networking activities, to use Stowe Boyd's concept
While there would be more to add on those 2, their future should provide with a good laboratory-like environment to explore the properties of some competitive advantages used by one or both of these companies.
Julien
- Posted by Julien Le Nestour
February 13, 2008 4:10 PM
Ok everyone, apologies for the ugly comment that I can't edit myself. I didn't noticed it was possible to put links in the comments. So here are some complements to the previous comment:
- my post on the lean mass concept relative to DNA
- the two companies I'm talking about, for those who may not know them: Tripit and Dopplr
- a blog post on the Tripit blog explaining their new feature. A quick look at both sites will give a quick idea of the service they provide, travel confirmation email scanning and travellers social networking for Tripit; just the social networking part for Dopplr.
- Posted by Julien Le Nestour
February 13, 2008 4:22 PM
Colleagues,
An excellent resource on this topic may be found in the book "Organizational DNA: Diagnosing Your Organization for Increased Effectiveness" by Linda Honold and Robert J. Silverman (2003). The authors present case studies of four companies that demonstrate different DNA types. Even more intriguing is an assessment tool designed to help determine an organizations DNA. Today's leaders will find the DNA paradigm an insightful lens from which to view organizational change.
Dr. Rochelle
- Posted by Rochelle Santopoalo
February 14, 2008 11:52 AM
All,
Thanks for the feedback about the full RSS feed. Both feeds - the individual feed for Umair's blog, and the aggregate feed of all HarvardBusiness.org blogs, are now available as full feeds. You can find both at:
http://feeds.harvardbusiness.org/harvardbusiness/
http://feeds.harvardbusiness.org/harvardbusiness/haque
Please keep the feedback coming - we really appreciate it.
Best,
Rob Roesler
Director of Web Marketing
http://harvardbusiness.org
- Posted by Rob Roesler
February 14, 2008 12:39 PM
I'm not convinced that decision making via peer to peer networks is great for a business environment. It engenders a herd mentality. It's already present in how Venture Capital generally works, with the interesting exception of a few 'non-herd thinkers'. I'm not aware of a study of their success, but they have the capital to powerup an opportunity that 'no one has signed onto' that may be more disruptive than group think that peer to peer would promote...I'd think.
Perhaps herd decision making returns better ROI in places today where the barrier to entry is more 'culturally intensive' as opposed to capital intensive.
- Posted by Lloyd Fassett
February 14, 2008 3:04 PM
Umair,
Video was awesome. All jokes about the sweater aside, and judging by just one sample, you seem to explain concepts in a clearer manner on video. Definitely a great supplement to your writing, please keep doing that.
- Posted by Tucker Max
February 14, 2008 5:30 PM
This comment is in regard to the video response.
There are a number of things that I think are wrong, or at least weakly thought out, with your argument.
For starters: MySQL being bought for $1B is laughable compared to the economic value that Microsoft has produced for shareholders over the years. If you add in the value created in the Microsoft ecosystem (the vast number of ISVs and re-sellers that make their living off of MS products), then the $1B is microscopic. So that acquisition is in no way proof that the "new way" of doing business (open source in this case) is more productive, or "better" than Microsoft's way.
You say that people are starting businesses like MySQL and not Microsoft. And that is supposed to make intuitive sense? People try to start businesses like Microsoft all the time - they are called platforms. But it is extremely HARD to do. It is so hard, that only 1 or 2 companies are successful at it in each generation. By comparison, starting up an open source project and selling services around it is a piece of cake.
Yes, Microsoft is struggling in online services. But its not because they are in "strategy decay" (whatever that means). Its because they were (and in some ways still are) focused so tightly on the desktop that they had a late start in the cloud. That isn't "strategy decay". Their strategy is still working great in the desktop universe - witness their amazing profits (which is, after all, what all this is about). Their "DNA" is great for that world. Their DNA would also work great in the new world - except that Google has an enormous head start and has itself built a platform (advertising in this case) with scale benefits that will be extremely tough (impossible?) to dislodge.
Re-casting this as having to do with "DNA" and "strategic decay" is simply trying to come up with new buzzwords for issues that can be explained in much simpler terms, and have been discussed for decades already.
- Posted by Joe Popovich
February 14, 2008 6:52 PM
Umair,
I am flattered to get your video response. Many thanks. I am even more intrigued by your thoughts. In your response, you talked about new management model that Google follows as against top-down, regimented and scripted organization likes of Microsoft follow.
I am now wondering about reactive nature of such traidtional organization. I did hear before that Google allows 20% of workers' time to be on their own projects. It seems to me that this is allowing Google to actually generate huge amount of ideas besides what they gather from their users as against pure "market research and outreach" based approach that MS follows.
So, is Google's 20% time policy an indicator of next-gen strategies? Surely sounds like it.
Here is my theory: Any company's value proposition is basically a unique capability (a mix of their people, process and products) they can offer to users. As long as you have a strategy to keep expanding this unique capability, you attract more users.
Google's capability increases quite rapidly because
* its workers are working everyday on new ways of organizing information even before its users ask.
* it differentiates itself with "cheap interactions"
* let's admit it, there is no one else delivers search and email better.
This sounds awfully like a "network effect". Microsoft has its "desktop network" with the developers of windows based products ("money side") and users ("subsidy side"). I suspect Google has "capability network", where more users move to Google because of the capability Google generates and more capability gets generated because more users. I would like to hear this community's thoughts on this theory.
- Posted by Rao Kachibhotla
February 24, 2008 1:34 AM
Great post Umair!
However, I will have to disagree with MSFT being in decay. MSFT has decided to take Google on, instead of being content with huge profits in client, servers and enterprise apps. It is losing the battle right now, but with the Yahoo (if/when) acquisition it may just end up winning the war.
- Posted by Riff Khan
February 29, 2008 1:30 AM