Back from the Dead

Burroughs-Sperry Rand and Honeywell.  Kodak and Polaroid.  DEC and Wang.  GM, Ford, and Chrysler. Eastern and Northwest Airlines.  Borders, Barnes and Noble, Businessweek and Newsweek. Blockbuster. Companies that were once dominant market leaders who are no longer.  Companies that once operated in cyclical growth markets, where markets are established and mature, and both customers and the categories remain the same.  Power shuffles back and forth among vendors in cyclical markets.

But the pace of change is merciless today, driving secular markets.  In secular markets,  a one time only market expansion occurs when a new category or new class of customers arises.  Usually fueled by technology, these changes require a new set of skills and metrics, and a whole new approach to planning.  Operationally driven planning approaches that look back at last year’s plan, set quotas for the coming year, ask for bottoms up input and reconciliations to form the basis of next year’s plan may work in cyclical markets, but are doomed to failure in secular markets.

The game changers indeed change the game…fast!  Apple, Facebook, and Google are obvious examples of secular market growth.  But what of today’s cyclical growth heroes?

24/7 Wall Street predicts 10 brands that will disappear in 2012.  They are: Nokia, Soap Opera Digest, mySpace, Corn Pops, Sony Ericsson, Sears, American Apparel, Saab, A&W, and Sony Pictures.  Yes, these companies are in trouble.  But are they all doomed, or back they be brought back from the media-pronounced dead?

Many can!  Think back to Cisco and Sybase, Agilent and Cognizant, Autodesk and Synopsis, Rackspace, Adobe, and Qualcomm to name a few.  Rather than doing the same old same old operationally-driven planning, these companies looked outside in.  They aligned around a common vision that meant something to people other than themselves.  They committed to a strategy aligned with a vision.  And they allocated resources in assymetrical ways to create customer success and drive out competitors.

Taking an outside in, market centric perspective, those who will come back from the dead will profile trends and opportunities that can create net new sources of wealth.  They will leverage the 5 hierarchies of power that Geoffrey Moore espouses:  category power, company power, market power, offer power, and execution power.

The most powerful of these is category power, which reflects demand for a class of products/services vs. other classes.  Think smart phones and cloud computing in contrast to desktop computers, email, and wireline phone services. Apple is on a prolonged tear by playing in high growth categories like smart phones, digital music distribution, and tablets.  Could Motorola have developed an iPod-like phone as a follow up to the Razr when it had the technology and know how to do so…well ahead of the iPhone?  Why did HP miss the Internet?  These are great companies with very smart, hard-working people and potentially powerful ecosystems.  Indeed the ties of the past, and doing the same old same old are comfortable but quite perilous pathways in secular markets.

I will talk more of the hierarchy of powers in upcoming blogs but for now, let me posit this.  You can can come back from the dead.  The fate of the “10 brands that will disappear in 2012” is not sealed.  It will take great leadership and some disciplined strategic planning from an outside-in, market-driven perspective, as well as a willingness to focus investments on innovations likely already in development…making big assymetrical bets.  I was there at Kodak in 1994 when digital imaging was an emerging area but 95% of the profits were coming from film, paper, and chemicals.  Did they bet the farm on digital, or dabble?  History can be a harsh teacher.




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