Thoughts on Business Model and Strategy

While talking about successful companies for the past few years, people always points to companies such as Google and Apple for reference. In Apple's case, Steve Jobs is always claimed to be the one that has great vision and thus has led Apple to its success. However, from a business case study perspective, many of the analysis is retrospective in nature. For example, nobody claimed Jobs as a visionary leader when he was working on NeXT which failed later. Apple was used as a successful case in the 1st Edition of "Crossing the chasm" but was removed in the 2nd Edition during its miserable times. Business school students can analyze the hell out of why Google is successful, but it was really not Sergey Brin and Larry Page's master plan from the very beginning that made Google successful. Instead, Google's success can be attributed to a number of small successes building up to its status today. (Check the unorthodox opinion in coincidences that made google successful.)

The term "visionary" or "innovation" is always also associated with failures and trial-and-error on the other end of the spectrum. The distribution of innovation and failures can be viewed as a normal distribution. If the variance is small, it is easy to guarantee that majority of the ideas will be within the regular limit, however, this also reduces the probabilities of both the innovative ideas and foolish ideas. By allowing large variance, the probability of getting innovative idea will be high, but the probability of foolish ideas increase as well. It is important to allow trial and errors if an organization would like to encourage innovation. If we divide the idea space into four quadrants with (consensus, non-consensus)x(right, wrong), then it is the non-consensus+right idea that will generate the most return. In reality, most people are comfort within the consensus+right or consensus+wrong area just to appear normal.

Innovation itself is not enough though, the organization should also be adaptive enough to adjust its scope and areas of expertise to the challenges that the market presents.