Transcript:
Okay then so I’d like us to possible maintain some discipline to try to use the framework to to extract more generic lessons about the advantages and drawbacks of each of the different approaches to innovation which we’re characterizing one is more open than the other not so value judgment there’s an observation the fact yeah and the more interesting question is so what in terms of good practices so we’re trying to extract it’s very difficult because as a safe divides people Protestants Catholics man City man United and then you have and drove Android and Apple and I’m obliged Lika to say there are other smartphone operating systems available at least until next year ok ok so at least restrain your sort of prejudices for it for a little while longer in terms of your affiliations and just try to and and the beauty of the framework is to some extent it helps you to do that to step back and be slightly more objective and this framework can be used more generically in trying to identify different types of capabilities including things like tacit knowledge more codified knowledge like reputations and brands and such like so it’s quite a nice framework more generically of trying to step back and objectively trying to figure out what is that capability or is it just something they do yeah ok because it capability contributes to some value creation and capture by definition ok so let us begin ok so the terminology is not sort of always obvious and it’s not as important to figure out what box it goes in but it’s almost like a checklist to figure out are we capturing all the tangibles intangibles codified non codified etc so for example sometimes we substitute systems for functional capabilities and they sort of works quite well down here regulatory is a bit strong because it infers government and suchlike which is not always there even often the case it’s more about more codified legal issues ok so you can substitute the terms you know we’re flexible and agnostic on that it’s more really like an aide memoire to make sure that we are extract all the relevant tape that is from the two examples the other health warning before we begin yeah is that this is not a sort of company versus company Business School Microsoft versus IBM you know let the fight begin it’s two different ways of innovating yeah okay so we’re trying to understand what the advantages from drawbacks are each rather than it is Apple better than Google let’s discuss let’s not yeah that’s not okay you need to drunk discuss those things when you had a few drinks because you’re never going to get anywhere okay the idea is to extract good and poor practices what they can and can’t achieve better okay let’s let’s try anyway okay so the first one is more about legacy position and suchlike and we’ve raised this a few times that it’s not trivial that we have this idea of choice in strategy but a lot of things a lot of the advantages we have but also some of the constraints we have are based on prior decisions and investments yeah so they create what we’re going to call positional opportunities and constraints okay so what we can do now is shaped at least not determined by what we’ve done in the past and what we perceived to be also okay so let’s begin with Apple what sort of positional advantages does the way that apples gone about innovating in this particular market space it’s not generalized it’s made lots of mistakes and dead ends for any real organization that have been sort of tippex doubt of its history but we’re talking about the more successful sort of entry into smartphones and such right that’s what we can find in it – yeah described as a market leader like this sets the pace for the smartphone industry they set the standards this much when industry so yes can we come here and retail what more precision is it because it’s helpful than to contrast it because I think within that there are several things you’ve nested in there you know in terms of I think you’re right in terms of if you like technological leadership or functional leadership what it can do tend to set the pace what others have to do at the very least I think you’re right so that’s a very precise thing but that’s different to setting standards because I think actually someone’s the polar opposite in terms of that so let’s unpack that a bit yes so certainly I think and you can argue or maybe you put it there but I think it is more about positioning yeah so certainly I’ll call it functional leadership yeah no I mean again I’m doing a very bad brain storming because the brainstorm you’re meant to yeah yeah you’ve missed out about five different products that failed in the market seriously I mean that’s like the Apple website I mean you gotta be really careful about that’s what I’m saying let’s confine its smartphones but I think nobody can argue whatever their affiliations that they haven’t been massively successful and one of the question you need to ask is why and how and how generalizable that is I think if you go back beyond that every case of an iPod you can bring out the case of a huge disaster and I think that’s we can’t draw lessons very easily from that but I think you’re right it has eight perception which I think actually is a should go in that box a perception of being a pioneer and I qualify that very carefully and that’s very important in terms of how you position how you’re priced products and suchlike so I think you’re right it has I think that’s separate to this leadership thing I think and I’m not I’m not dissing it and saying perception because that you know against Tom Peters who said was it aggregate perception is reality the idea is it you know if it enough people believe it to be so then it is so and they will behave as if its own it’s not quite right as a save you know if you think there’s a bridge there everyone thinks there’s a bridge here and there isn’t a bridge there bad things happen yeah but you get the point that if if there’s a perception this literary wind a little bit it’s a bit like Audi LD be a little bit careful here LD has a consistent marketing message over maybe 15 years it’s actually incongruent with any objective fact and we worked in the country for eight years we benchmark processes and products but I would bet that in terms of the target customers the message is now accepted as truth yeah that it’s technology led and it’s engineer lead and suchlike you know it’s a division of Volkswagen which does certain things well and I think it’s not so well and that’s a good example where I’m completely agnostic in terms of perception of reality but perception as a pioneer is a legitimate positional advantage yeah why do you think why is that an advantage in itself we can argue for a million years about whether it’s true or not but I’m arguing actually relevant in terms of behavior purchasers perception of a pioneer or an innovator slightly different pioneer implies early to market innovator this is a better and bigger and different slightly different but but so what a volunteers let’s step back a bit so what we’re trying to do is look at general eyes for lessons and we’re not trying to saying you know we will not in the next 45 minutes agree that one’s better than the other that’s not the point the point to say what’s generalizable and what does that model do better than that model yeah so what benefits could be in have a reputation as a pioneer have more generically yeah yeah people will give you on unbalance and this is generic this is not an Apple observation generically it has several good things for the organization you one is if you get it right behind self-fulfilling because people will reframe features as being innovative because they’re in that product it will create a halo 2 as a pricing strategy you can start to charge premium prices for monday necessaries and suchlike which is a very smart thing not a very good thing very smart thing there’s a whole range of benefits if you can get that perception right and the real thing in terms of innovations people will try out new products more readily so going back to that discussion we had about diffusion and adoption you know controlling for everything else if you have a reputation of Pioneer people are more likely to try out your new offerings than if you don’t so you create a confidence a trust in that and you creates a result what I guess marketing guys are called some sort of brand loyalty yeah and you find that you find that in luxury cars you find it in smartphones people get on the trajectory and they tend not then to enter into competition with a computer and that’s smart if you’re producing those products we can step back in a moment say is it smart in terms of innovation the system it’s a separate question there’s a strategy that survival strategy not just in smartphones but elsewhere yeah so that’s interested so we’ve already identified a couple of things that go above and beyond that particular model yeah sorry yeah and talking about the investments and reputation yeah mmm that’s good point now yeah yeah yeah but it’s interesting again the interesting things many many of the bits of what both models aren’t really new but they’ve been put into different contexts and this interesting to see how well or well they don’t work so the tide outlet thing again it’s a very old-fashioned view and Matt’s sister used to have that with Panasonic shops and Sony’s well Sony still do actually and they’re not very successful so that’s not an end in itself but it can where you have a product when we get later on in terms of the other things where you have a product that some of the attributes are about aesthetics and touch and feel then you go back to our discussion of diffusion yeah trial ability yeah you can watch an advert on the TV with a load of teenagers dancing around in chinos and thinking that doesn’t appeal to me but you know if I experienced then what a multi-touch screen or aesthetically how pleasing it might be that’s what I need to do experience it and there ain’t no way they’re going to post it to you and use it for 24 days on your own sort of things so shops are a great way where you have an advantage in terms of touch field look for people to troll these things then you add the service wraparound you’re talking about where no people come around the Polo who kind of help you gobble I’ll show you how to use it isn’t it great unless I thing you create an additional thing so I think that’s very particular where aesthetic design and or touch and feel are very important yeah so I think that is a smart thing and I think you’re right that is in certain market it’s not university a smart way of building a sort of positional advantage yet yeah yeah but you ought to be careful because they have been very shy if you read the company history and I have believe me they’ve invented everything and then when he scratched below they said well that was an acquisition that’s an acquisition that’s still a court case that’s a court case they quite that from Xerox but don’t acknowledge it you know and so it’s bad that’s actually open innovation but they’re very good appropriating these things because they’re creating this perception of the the pioneer again I’m not I’m not so it’s good or bad so it’s quite clever because the benefits that we get in terms of adoption and diffusion in such light so it’s you know if you get that right it’s very clever indeed well that’s true or not it’s almost by the by the side you know you could argue objectively sony’s a more inefficient company in terms of patents and new products and technologies and firsts but it’s a disaster case in terms of customer experience and and products yeah it’s the polar opposite almost of Apple maybe you need another column for Sony but we could be quite late yeah but I take your point yes certainly they that’s part of this folklore building this and it’s on their website and everything else is hidden in Wikipedia the source of all knowledge so it must be true yeah yeah yeah yeah that’s right yeah yeah yeah yeah that’s right the quiet from the PhD student I think actually must have I’d be very rich or very stupid sign it over I suspect the latter actually yeah yeah what’s really clever I think what’s really clever again I think we need be careful about generalizing but I think you’re right I think one of things are not convinced it’s cool anymore but the clever thing they’ve done is from being if you like counter institutional they define themselves by not being IBM and corporate and then to carry that forward and nobody challenges that when they had dominant market share in almost every market outside Asia and so they actually become the norm but they still promote this it’s again it’s it’s counter you know counter the sort of industrial and corporate so that’s the really I think the clever thing is go from a niche player in PCs to a dominant player in smartphones to play the same card and that’s very clever so I’m going to run put call or counter you know counter culture I think what they clear is this consistent brand in whether it be colors and music and sort of demographic that they associate with despite the fact I think the average age of an iPhone use is 45 or something I say that sorry to offend people by the way I mean I didn’t mean it 45 as if it’s how dare they but actually it’s quite an old demographic partly cuz they can afford them and you know they don’t know any better sorting but I’ll show my car so so so soon
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