At C-Level

Sony's New Reader Takes Innovation Leap

Every executive has visions of introducing a brave new product with bold and captivating features that hurdles the competition, transforms the market and establishes a long-term foundation of share leadership.  Nice dream.  Unfortunately, like most of our fantasies, reality never quite catches up with the vision.

We call this an Innovation Leap.  As a strategy, it's easy to conceive: Aggressively innovate to make a product a lot better than your competitors.  But the challenge, as in any leap, is how far you jump and in what direction.

Consider the innovation icon Apple.  The iPod is a classic example of a near-perfect Innovation Leap.  There were plenty of MP3 players on the market when Steve Jobs introduced the iPod.  But it's engaging user interface and sleek design got the market's attention.  And iTunes absolutely sealed the deal.  The example should be instructive.  The iPod offered dramatic innovations in broadly important features (UI, design, access), and iPod has dominated the MP3 market ever since.

Which brings us to this week's product announcement in the latest cool personal technology device--Sony's Daily Edition e-reader.  Amazon Kindle owns the market it created.  But Sony is in a good position to challenge, with a very strong brand name and matchless pedigree in consumer products excellence.  Plus, the company badly needs a big win, so it's willing to take some risk.

The Daily Edition is better than the Kindles on the market.  The AT&T partnership brings it to Kindle parity for downloading content any time, any where.  But the 7" touch-screen is clearly vaults ahead of Kindle with a technology feature everyone prefers for both convenience and cool factor.  And the partnership with libraries, giving free rentals for 21 days, is another big idea.  (I checked my local community library and was pleased to see it participates with many free digital audiobooks.) 

A well-executed Innovation Leap.  Major changes in relevant areas.  I'm reminded of something former PepsiCo CEO Roger Enrico once said: "Beware the tyranny of making small changes to small things.  Rather, make big changes to big things."

Game on, Amazon.  There will be plenty more action in this turf war, both from Sony and Amazon as well as Barnes and Noble and other new competitors.  Look for color screens with graphic capabilities, cool new designs, easy access analysis and commentary, video and, of course, access to millions of books and periodicals. And eventually, a victor will be crowned, the result of innovation by leaps and bounds. 

A Sense of Urgency

Harvard Business School professor John Kotter has earned the respect of the business community over the past 25 years, having authored 15 books and numerous articles.  Much of his work has addressed the difficulties business have trying to change, and he is widely acknowledged as the preeminent academic expert on the subject. 

So when I address Kotter's latest book, A Sense of Urgency, I do so with profound respect and the deepest humility.   Two things:

1. This isn't Kotter's best work, and in fact, at $22 for 193 small, large-print, wide-margin, generously spaced and overly headlined pages, it felt more like an article opportunistically morphed into a book.

2. Nevertheless it's a worthwhile read, because as Kotter rightly points out, the lack of urgency is one of the most daunting threats that businesses face. 

The prescriptions for leaders are important, if not profoud: Behave with urgency every day, be externally focused, appeal to emotions, take advantage of crises and neutralize the No-No's (entrenched skeptics that resist change).

Great leaders have an intrinsic sense of urgency, and great organizations follow suit.  Business today is moving at a breathtaking pace, and complacency is a formula for failure.  (One could argue this has always been the case--see General Motors.  The difference is that in today's economy, disaster arrives more like a tsunami and less a glacier.)

It's worth the few hours it takes to get through this book, if for no other reason than to do a gut-check on your own company.  Is your organization driven by a sense of urgency to get better, to fix problems and to deal with perpetual changes in the external environment?  If not, can you hear the clock ticking?  Hint: That's a time bomb ready to go.  The alarm clock went off a long time ago. 

Talent is Overrated

Geoff Colvin from Fortune Magazine is one of my very favorite business writers.  His pieces are always on interesting subjects and filled with intriguing insights.  He has a particular interest in understanding what makes business leaders successful--or not.  His new book--Talent is Overrated--blends hard and soft research to offer up a unique theory about why some managers make it big while others falter.

Colvin argues that the key differentiator is not brains or any other natural ability.  Nor is it simply hard work.  Rather, what pushes some to the head of the class is a rare ability--or rather intense commitment--to methodically improving personal performance through what Colvin refers to as "deliberate practice."  This process, which mirrors the path to the top in sports and music, involves working diligently and intensely on your personal weaknesses, setting a high standard of personal excellence and, just as the term implies, practicing until you get it right.  It's a function of discipline, focus and persistence.

There are other keys, according to Colvin.  Great leaders usually enlist the help of coaches, mentors or others to provide feedback along the way.  It's hard to go it alone.  (Even Tiger Woods uses a coach, he notes.) 

If you haven't followed Colvin's stuff in Fortune, Google some of his columns and articles.  And if you're serious about running with the elite CEO's, try deliberate practice.

Personal Capitalization

I just watched an interesting video clip of Malcolm Gladwell talking about ideas from his new book Outlier, which is due out next week.  He was discussing the principle of capitalization, which deals with how effectively people reach their potential, or leverage their personal capital.  And the conclusion is, not surprisingly, that effort and persistence play the pivotal role.  And further, what we achieve and accomplish has a lot more to do with our capitalization (effort and persistence) than our capital (innate talents). 

 Most of us will nod our heads at that, but deep down not really believe it.  Gladwell gives the example of Kenyan distance runners, which have dominated the sport for decades.  Are they genetically inclined?  Maybe.  But Gladwell relates that in Kenya, with a population of about 35 million, over one million boys between 12-17 years old run 10-12 miles each day.  That's capitalization.

In his book, Gladwell references the work of intelligence scientist James Flynn, who once studied why Chinese immigrants to the U.S. perform much higher than their white counterparts.  Flynn determined that although the IQ's of the two groups were similar, the Chinese tended to achieve professionally at a level equivalent to 20 points higher on the IQ scale.

Talent only gets you so far.  Then persistence, desire and work ethic take over on the path to success.  I'm reminded of a few favorite quotes:

"Most people don't recognize opportunity because it's dressed in overalls and looks like work." 
                --Thomas Edison

The heights of great men reached and kept
Were not attained by sudden flight,
But they, while their companions slept,
Were toiling upward in the night.
                --Longfellow

Hard as Dell

The WSJ reports that Dell is looking to sell its factories. It’s the death knell of their famed business concept, linking just-in-time production and Lean manufacturing to provide customers with customized products and fast delivery. The fact is, the business model worked unbelievably well for a few decades. Dell became one of the most successful and admired companies in the world. I remember a few years ago listening to former CEO (and an old B-school classmate of mine) Kevin Rollins talk about Dell’s management philosophy and thinking this was one of the great businesses of the era. I still believe that the company was doing extraordinary things.

But more than anything, that may be why the Dell has stumbled badly in the past three years. It was simply too slow to abandon a model that had been so wildly successful, but whose days were quickly passing, driven by the consumer switch to more manufacturing-intensive laptops produced cheaply overseas and purchased conveniently at retail outlets. Dell had (and still has) a truly great team of employees, a remarkable culture and a highly valued brand name (which is, unfortunately, eroding). But the company couldn’t generate the sense of urgency needed to acknowledge the external realities of a shifting market and make the necessary changes.

John Kotter has studied and written more on change than anyone. His most recent book, A Sense of Urgency, explains how typical it is for successful companies to struggle with change, burdened by the victories of the past. (For another classic example, recall Kodak and its excruciatingly slow recognition of the digital revolution.) Every company, every CEO is vulnerable to this myopic maladaptation. Forgive me for repeating the Gary Hamel quote once again—because I like it so much: “All companies are successful, until they’re not.”

Game-Changer

GAME-CHANGER, 2008, Ram Charan and A.G. Lafley

I started my career at P&G in brand management.  And while the learning was extraordinary, I always felt the company was old, bureaucratic and stodgy.   I had the opportunity to work with A.G. Lafley quite a bit in my first assignment, as we were both in laundry brands.  He always seemed to me outside the traditional Procter mold--wicked smart but a thoughtful, open-minded and really nice guy.

Fast forward 25 years and what A.G. has done as CEO is incredible.  Procter is one battleship that I didn't think could turn, much less on a dime.  But reading Game-Changer one begins to appreciate what leadership and commitment can do, even in the largest and most traditional organizations.

Game-Changer is an enlightening read.  Lafley and legendary author, consultant and scholar Ram Charan often tag-team the writing, each bringing a unique point of view.  Sometimes this gets awkward, as the P&G story is interrupted by examples from other companies (which skew a bit from India, making a noticeably unusual sample).  But that's relatively minor criticism compared to the richness of the transformation story at Procter, which has become a leader in commitment to innovation and has reaped significant financial rewards as a result. 

The beauty of Game-Changer is that, unlike many business books, it is relevant to both mid-sized companies and corporate giants.  For the Fortune 500, P&G's experience is a powerful example that radical and dynamic change is possible (see also GE, Whirlpool and IBM).  For smaller companies, change is a lot easier, and the P&G model is full of ideas for potential initiatives.

This is a quick and easy read that never comes across as arrogant or self-serving.  It does present itself as an arresting example of a new era in corporate management.  I would have never guessed that would have come from Procter & Gamble.  In fact, here's the thing.  P&G has had a legendary track record over its 170-year history.  But frankly, it was never considered a great place to work, at least for the brand management folks.  Even more impressive than the reignited financials, the company's commitment to innovation and change make it sound like a really terrific place for a smart marketer to ply his/her trade.  Now that's an innovation that will pay long-term dividends.