Friday, January 13, 2012

Obliquity - The best way to achieve high objectives: A Review of Obliquity by John Kay

Obliquity by John Kay promises and delivers as an 'obliquely' enjoyable ride :) The blurb promises it a '...book for pleasure... gain invaluable insights.'

Referring to Csikszentmihalyi's Flow, the author talks about happiness through the pursuit of passion. Makes lots of references to billionaires, huge corporations, great people,... pursuing their 'art', in turn, lots of money. So it boils down to my own belief, Follow your heart, Use your head. The success will chase you!

An interesting graphical fact about Panama being the shortest cut between Pacific and Atlantic Oceans discovered by gold seekers. An oblique route discovered obliquely ;)

He has a way to drive his points. The striking one is about a cathedral being built. Three stone cutters answer 'I am cutting stone' (Action), Building cathedral (Intermediate State) and 'Working for the glory of God' (Objective). These definitions become the basis of the book.

He also talks about Sudoku being a closed game since only one solution lies for a given problem; Chess being little more open with multiple possibilities but restricted by rules at the beginning of the game. But, the real life is open as the infinite solutions lie and the rules of the game change! Over and above that, there is no clarity on action, goal and objectives as they keep on shifting! Whereas, straight forward thinking is good for solving closed games, though we enjoy the process of obliquity in Sudoku, Chess,.. the computers can defeat us! The real life needs obliquity, where computers can only support us.

He gives an example of Filippo Brunelleschi's ingenuity in winning a contest to build the dome of Florence Cathedral. And I discovered thru internet the many smart techniques employed by him while building the dome.

As we tend to solve open problems, 'directness' doesn't work as there are too many 'unknowns' and 'unknowables' both known, unknown and unknowables! Obviously, a direct solution hasn't emerged or can't emerge. One needs to solve it by 'obliquity'!

I have a view that for any entity or situation: closed, closed with multiple solutions, and open problems exist at 80:16:4 proportion (though reminds Pereto Principle (80:20 Law), just considering random distribution, may serve as a rule of thumb in normal times/situations!). Whereas, the 80%, the closed ones can be solved by the front end people assisted by computing devices, whose tasks have been highly routinized and managed by managers, who solve 16% of those little more complicated issues. The leaders need to lead the managers and solve the 4% issues, which are open in nature.
 
That was a wonderful book! The guidelines apply while working on open, unpredictably complex problems. For the closed or solved problems it is better to stick to 'directness'!

The best entrepreneurs rather copy already solved problem from the others. So that they can assign more resources  to solve the complex problem at hand to deliver unique offering. One such example quoted is Netflix, which focused more on logistical problem of delivering DVDs within 48 hours, while copied Amazon's website! The wisdom lies is in choosing between the obliquity and directness.
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A truly amazing and helpful book for the leaders, entrepreneurs and intrapreneurs focused on breakthrough innovations.

Monday, January 2, 2012

Demand Creators: the Pioneering Business Leaders - A Review of 'Demand' by Adrian J Slywotzky

Slywotzky tries to unravel the mystery of demand. He does a great job in view of the latest products which have created huge demand, recently. He has termed them as 'Demand Creators'. He has identified the characteristics of such demand creators and has successfully captured the essence through good number of great case studies.

The framework has the following;

- Magnetic: Irresistible offering = Functionality * Emotional Pull!
- Addressing the gaps in the Hassle Map = the need - the product
- Connecting the dots (Backstory)
- Trajectory of functions and features:
-Trigger: Convert fence sitters into customers/consumers/clients
- Variation: De-averaging
- Launch
- Portfolio

For each of the elements the author offers case studies to drive the concepts well.

For Magnetism, he offers the example of ZipCar. The venture was founded out of passion for environment. The scale up happened, when the new CEO identified and addressed the right niches with focused efforts with the right features & functions aided by emotional pull through the appropriate promotions & cars! The choosing of the right niche market corresponds to Geoffrey Moore's concept of hitting the right (most of the times micro) niche as the first pin to hit 'the bowling alley' phase to foment 'tornado' and ride the same.

The next case study is on Wegman's, which has the best of Walmart and Wholefood to offer 'WholeMart'! experience. Who says the opportunities are restricted in retail?! With right imagination with appropriate strategy and execution, demand can be created in any sector!

For Hassle Map Gaps Slywotzky offers a case study of Bloomberg, who was a trader himself and was extremely unhappy with the pain points. Bloomberg developed functionalities and emotional link ups through his product offering. (One of the examples: the sacked traders get to keep the account with them for a few weeks matching with their next job! Bloomberg went viral with the traders!)

The other case study under 'hassle map gap' is Caremore, which addressed the gaps in American health care system to deliver great preventive, well co-ordinated health care for the elderly and the frail ... and looking forward to address the other niche markets. I can see 'bowling alley' phase of technology adoption curve by Geoffrey Moore, being handled well by hitting the right pin to foment the tornado and ride the same again!

For Backstory, which the author takes from movie context, he chooses Kindle and TetraPak as apt case studies. Whereas Kindle story is well-known, Sony's Librie' story is not so well-known. The authors points that Jeff Bezos bought 20+ Librie's to study to build Kindle is a good pointer. 

In case of Tetrapak, the back story unfolded over nearly 5-6 decades before TetraPak made headway. The patience and tenaciousness are the prerequisites for the game changing demand creators! To Jeff Bezos credit, he is the one known for forgoing immediate quarterly results to achieve long term goals.

For Trigger, where the prospects on the fence are attracted towards the 'magnetic' offering, the author provides us the case studies of Netflix and Nespresso. Whereas, Netflix observed 'within 48 hours' delivery as a trigger and rolled out distribution centers all over US to enroll millions of clients; Nespresso found 'trial' as a trigger and induced trials for the target niche markets through the first class flyers, customer referred stores, then 'stores-in-stores' and also Nespresso boutiques. In the case of Nespresso, the challenges within huge FMCG vendors' bureaucracy also are tracked.

Increasingly I am finding the book to be of  much better utility than I had anticipated. I can see parallels between this book and 'Technology Adoption Cycle' by Geoffrey Moore. Whereas Geoffrey Moore specifically addresses the challenges of high technology start-ups; this book also highlights the challenges and opportunities in traditional large cos and NGOs too.    

For Trajectory, the continuous improvements needed to sustain the momentum of demand creation, the author chooses Teach For America as a case study. The initiatives of the teachers is a continuous improvement programme to gear up to meet the specific demands and needs of the individual children. Another case study is on 'Pret-a-Manger' where the challenge was to revive the commitment to  standards prior to the recession.

Variation or de-averaging identifies and addresses challenges after the technology crosses main street phase of Geoffrey Moore's Technology Adoption Curve. The case studies of reviving interest by addressing specific niche markets with appropriate offerings by Seattle Symphony and Chunnel addressing near collapsed adoption through Business and Leisure Traveler specific initiatives.

The author's efforts open up many possibilities in understanding the demand and market creation and also satisfying the market needs beyond maturity phase. I can clearly see the linkages between Demand framework, Technology Adoption Curve by Geoffrey Moore and the connections between Realities, Execution and Ideas. I will work on it shortly.

In the next chapter, Launch the author explores the DNA make up, characteristics, of the demand creators and comes with the following;
  1. The Demand Creators are good in addressing the 'fatal flaw',- the search being an outcome of Gary Klein's recommendation of 'pre-mortem', which is supported and recommended by Daniel Kahneman in his latest 'Thinking, Fast and Slow'. He also talks about Semmelwels Reflex, many times believing is seeing too!
  2. The Demand Creators are good in having 'internal competition' to unleash the thoroughly whetted ideas into the market. He offers the Honda Prius v/s Toyota's first hybrid car comparison. Apple, Pixar, celebrate such initiatives to deliver 'super duper hits' consistently violating Goldman's Law of 'Nobody knows anything'.
  3. The Demand Creators 'imitate 2B unique', to focus on their critical offering and are content to imitate others on other aspects freeing up superior resources to focus on unique part of their offers.
  4. The Great Demand Creators 'emotionalize their offerings' compare Apple v/s others!
  5. The focused unique organizational structure' to cater to the needs of the specific offering is another hallmark of the Demand Creators. It is needed because the Demand Creating offers are unlike the other offerings in the market, and they create new markets. Better understanding of the challenge and extraordinary energy are prerequisites for the demand creation process. He offers telling example of Lotus 123's June Rokoff's lean, mean and energetic leadership in bringing the new software version needed to move to the next level.
  6. An artful balance between confidence and fear; the author brings the image of David and Goliath creation by Leonardo da Vinci to capture the essence. A Demand Creator has a challenge to change the reality, which is much greater than the Demand Creator, hence the balance is badly needed.
  7. A launch of a Demand Creating offering is not a day's work. It is series of events not an event by itself. It needs to be rehearsed and choreographed for months together. The author offers the examples of the first draft and the final one of Shakespeare's famous soliloquy from Hamlet, 'To be, or not to be...'
To summarize, the author offers a shortcut while assessing the great Demand Creators, which is assessing the following;
  • Demand (Reality)
  • Resources (Execution)
  • Management Team and (Execution and Ideas)
  • the Leader (Execution and Ideas)
The above priority is followed by Kleiner Perkins in investing on great ideas to deliver great returns by investing in Google, Genentech, Amazon, Intuit,....! This is captured in the next chapter on Portfolio.

The chapter on Portfolio covers unique management styles of Lasseter of  Pixar who had 12 back2back hits with 48 Oscar nominations and 24 Oscar awards defying 'Goldman's Law'. The same thing can be said about Merck's block buster drugs for the period between 1978 and 1992 under Roy Vagelos.

.... A seminal book on demand creation in these wonderfully great times!