This book answers the question of how to succeed in a world full of and disrupted by technological disruption.
Editor’s note: Looking at the world’s leading companies, facing the disruptive wave caused by the digital revolution, some people are radical and conservative, but all companies that have successfully survived the transformation period, and even achieved new growth through transformation, They all have some similarities. What’s the secret? Are there some reproducible practices and models? This article is selected from “Wise Turn” to help you comprehensively answer common management questions during the transformation of the enterprise from different levels of society, consumers, and industries.
Seven management errors
We found seven common management mistakes, which also explains why so many restraint values have not yet been released by established companies. Many of these management errors are the result of generations of executives following best management practices. Each error is designed to solve a specific problem, but it either fails to take into account its long-term health impact on the organization, or fails to scale up fast enough when disruption is accelerating.
Too lean.
Eric Ries, an American entrepreneur and writer, advises startups in his book The Lean Startup: The first step is to sell the smallest Turn into viable products (MVP), and then use low-cost channels such as social media to interact closely with customers, seek their feedback, and quickly iterate on the products accordingly.
Although lean methods are popular with new and old companies, if a company invests all its resources into a single product, it will fail. Nowadays, the market is getting faster and faster, and the ability to produce new products is more important than the specialized ability to produce only one product, no matter how popular this product is.
Although there are clear signs that customers are tired of a certain product, the company still puts all resources on this product, at which time it will accumulate confinement value at the enterprise level. By doing so, companies will let talented developers and wise entrepreneurs miss out on opportunities to take advantage of the next wave of new technologies for innovative activities.
If the market simply develops and waits for the next innovation to come, then according to the requirements of lean methodology, the use of core resources for repeated iterations of products and route corrections can solve the problem of errors. But before demand saturates, management must organize a new team to start new product development. If not, it will fall into the so-called death spiral: on the one hand, the number of loyal customers will continue to decrease; on the other hand, the company must spare no effort to provide better services for customers’ incremental needs. If such a company can survive, the only chance is to be moreCompanies, and the purchase price is usually the sale price.
Let’s take a look at the loyal followers of the Lean Methodology, Groupon, which is still doing business around the core innovation of “social shopping”. The so-called social shopping is a way for consumers to use their scale advantages to negotiate product discounts with sellers. Although there are obvious signs that the high enthusiasm for social shopping has receded, Gaopeng Group Buying is still focused on proving the concept, orderly adjusting the website interface, merging the closing-down competitor LivingSocial, and possibly entering the travel group buying Domain—This is not a wise move. At the same time, the company’s failure to adhere to basic principles has led to a surge in operating costs. Before and after the listing, the company had a dispute with the Securities and Exchange Commission (SEC) over embarrassing accounting errors. By mid-2018, the market value of Gaopeng Group Buy had fallen by more than 70% compared to when it was listed in 2011, and sales revenue has been declining since 2014.
It’s not just a strong follower of the Lean philosophy that misses the market “forest” by indulging in existing customers “trees.” TiVo is a TV recording technology company in the United States. It launched a digital video recorder in 1999 and took the lead in popularizing the product, known as a disruptive innovator. Soon it became synonymous with video-on-demand services: TiVo as the company name became a verb, meaning to record a show for later viewing. But since then, the company has been surpassed by Internet-based streaming applications that have broken the pay-TV business model in a more thorough way, including Netflix, Hulu, and Amazon.
TiVo continues to incrementally improve its products and license its technology, but many of its key patents are about to expire. Although TiVo was acquired by entertainment software company Rovi in 2016, the market value of TiVo has fallen by two-thirds over the past 5 years. Currently, it has outsourced hardware and retail operations, but it has recently denied the possibility of more acquisitions.
In the jungle of more competitive smartphone applications, the instant saturation problem is even more serious. There, if the continuous improvement of technology fails to create potential new value, it usually means the end of the company’s fate. In this regard, product developers often get the focus wrong.
Take Zynga as an example. This is a very successful game developer who has developed a number of popular games such as FarmVille, but it is almost planted in the ups and downs of “You Paint My Guess” (Draw Something). As a drawing and guessing game, “You Draw My Guess” attracted 16 million players in just a few weeks after its release in 2012. But in the following months, as the company has not found a suitable alternative game, play