And what to do about it
The Gordian Knot, presented to Alexander the Great in 333 B.C.,
has become symbolic of an unsolvable puzzle. History suggests it may have been an
actual knot, impossible to untie. In fact it wasn’t until recently when Polish physicist
Piotr Pieranski wrote a knot program* called SOTOS that the knot was finally undone.
It turned out not to be a knot at all (note: when Alexander was presented with the
challenge no rope ends were visible) but rather a loop of rope (2 ends spliced together)
that was probably wetted, somehow entangled, and then shrunk in the sun. With insufficient
looseness it would have been impossible to unravel the rope.
However, Alexander the Great was innovative and had an interesting
solution to “luein” (loosen/solve) the knot. After all, Zeus had said anybody that
could undo the knot would rule all of Asia. Thusly motivated Alexander stared at
the twisted mass for a while, then abruptly took out his sword and sliced the knot
in half. Nobody had thought of that solution before. But that was ok. After all,
the challenge was to “part the knot”. The how was left to the attempter. It wasn’t
how he played the game—it was whether he won or lost.
Result: Problem solved by looking at it differently than others.
And, of course, Alexander went on to rule Asia.
Alexander knew how
to innovate.
Alexander the Great was known as a great innovator in matters
of war and competition. Napoleon was using Alexander’s techniques a thousand years
later and they still worked (well, except that last time…).
Alexander looked for different ways to do things. For example,
Alexander was the first to use the “strike at the weak spot” strategy. It seems
simple and obvious now but in 334 B.C. it had never been formalized and he used
it to shatter more powerful, better equipped armies. Never satisfied, he then refined
it by cleverly creating a weak spot in the enemy line, then attacking there.
How? Simple if you look beyond the obvious. Alexander knew the
enemy (his competition) was always watching him. He realized he could cause the
enemy to physically move around by rearranging his own men. Using this, Alexander
would, by moving his men, carefully have the enemy arrange itself in a manner that
would ensure its own defeat. This led to less costly victories for Alexander and
in war cheaper, with good results, is always better. This is why smart generals/CEOs/managers
are always asking themselves, “How can I control my competition?” This makes competition
cheaper and thus better for our equity holders. It’s fun too.
However, in the example, you need to look carefully at what Alexander
did in the battlefield. It has two parts. One was the pure innovation (strike at
the weak spot), the second was a refinement (create the weak spot in the first place)—the
second was a sustaining move on the previous innovation. Don’t confuse them.
One of the definitions of a well-managed company is one that
carefully listens to its customers and provides what they want. Super performing
companies do this better than their competition via a sort of hyper-alignment with
their clients.
But this extreme client centricity relative to innovation does
carry a risk. You are thinking inside the box (e.g. the client’s). And if you are
doing a good job you are probably receiving rewards and that feels good in all sorts
of ways. But you probably aren’t truly innovating. You must objectively examine
your actions and see if you are really just sustaining, in some fashion, an existing
product or service (even if it’s “new”). There’s a difference and the difference
can doom even a great company.
How? Even if you are performing greatly you have to ask yourself
what you will do if somebody comes along with a client usable solution that is so
different that you never even thought of it. Your client never thought of it either.
In fact, maybe nobody but the goofy guy in the fabled garage, or some small market
“skunk works”, ever thought of it. But it works better than your solution. And your
clients gravitate to that new solution because that’s what their equity holders
expect them to do—wouldn’t you? (Have you ever noticed how often small cap skunk
works often smell like money? It’s an invigorating odor, even if it can occasionally
smell like people have forgotten how to bathe...).
What makes this especially grim is, on the surface, you’re being
penalized for being a “good”, well-managed company. You listened and were guided
by your clients. Maybe you even took a bit of a chance and got out in front of them—helped
them see a marginally better way. Even improved them. Companies win awards for doing
that.
However, in many cases what we’re doing with that innovation,
without knowing it, is simply treading water. Looking at the knot the same old way.
In fact some of your well-intentioned, engineering driven, innovation may simply
be “over-satisfying” the client’s need and that’s not helpful to your equity
holders. In fact it can be damaging because you are diverging from what your client
actually needs and wants to pay for. Less can be more. Eventually customers learn
this.
The point is although you are admirably aligned with your clients
you are still at risk because your client will switch away from you if a better
way comes along. They have to.
Find your industry’s
Gordian Knot.
Then untie it.
The challenge is to also venture outside the often small and
constricting, client-driven, innovation box. Really do it. A lot of us think we
do it, but we don’t. Not really. Why? Frankly, it’s a strange place for a traditionally
well-run company. Too many unknowns. Somebody will ask you, “But what’s the ROI
going to be?” Huh? You can’t analyze what doesn’t exist. True innovation, the real
fresh stuff that flips your industry on its ear, is a financial analysis black hole.
I know many CFOs and they have it tough enough already. Black holes? “No thanks.”
But you have to do it. Some call it “disruptive technology.”
That’s a bit pop for my tastes but the idea is there. And I agree with it. It is,
after all, the polar of merely sustaining and that’s risky. It speaks to the notion
that you can’t get stuck—sometimes you have to just throw away what you call normal.
Whatever you label it, figure out how you are going to pay for
it and who is going to do it. Then give them some space and stand back. If it were
me I’d tell them to come up with the industry’s Gordian Knot and when they came
up with it I’d tell them, “Great, now go figure out how to untie it. Or find the
guy or gal in the garage that may already know. Take a checkbook. Get going!”
Is the approach too weird? Too expensive? Then create an internal
mechanism (preferably an accountable person or small group—and yes, it may be a
peculiar job description) whose job it is to know about anything (ANYTHING!) that
can cause your customers to do things differently. Why? Because if they start doing
things differently they may not do them with you. And this has killed off many a
“great” company.
I once had a plaque made for my office wall. It said: “A company
exists to create customers.” As I’m older now I think I should add: “and keep them
for a long, long time.” Focusing a little less on what we can actually see and measure
is a good way to ensure the new addition.
Think about it…
____________________
*Lest you think Piotr had way too much
time on his hands physicists study knots because they think that matter may be composed
of string-like, possibly knotted, pieces of space time. Thus “String Theory.”
Interesting stuff—especially if you have a bottle of aspirin around.
