Apple and
Samsung both made major
announcements in the past month.
iPhone 5S and C, a curved glass
Samsung phone, 64 bit processors, fingerprint
privacy control and more.
What the companies said to the world reflects two very different strategies.
But both excel at what they do. Apple is the most successful service company on
the planet. Samsung is a manufacturing and innovation powerhouse. What have we
learned from them in recent weeks about where strategy and leadership should
focus?
The short answer is we are learning about how the future of business is
being bedded-in by two extraordinary practitioners. The longer answer is we can
also learn a lot from the conflict between them:
1. Business is about the platform. Apple is no longer a
product business, despite the apparent dependency on the iPhone. It is a
platform business and its leadership lies in continuously developing the
potential of its platform. If you want an insight into Apple, look at the
iPhone 5S. Its major innovation is the A7 chip and what that does is open up a
new word of service – contextual computing for example, and interaction with
data rich services in monitoring, personal data, health data, location services
etc. Apple continues to win on profits because it has mastered, indeed is
inventing, platform and ecosystem business strategy.
Look at the form-factor of the iPhone and you see it is more or less
unchanged. The 5C has different colors but there is no underlying innovation to
go with them – no innovation in material to justify the superficial design
change. In fact the 5C is an anti-Ive product. A designer of Ive’s stature
should not slap color on a phone without some underlying justification like
making use of a ceramic or other innovative material. But that’s ok, because
Apple is innovating the platform and it has not been swayed by criticism of the
product. Thaat’s how it keeps Samsung at bay.
Leadership lesson? Leaders need total focus on
business transformation – from product to multiple services and revenue streams
built around platform and ecosystems where possible. It’s a really durable
competitive position to build.
2. Making the big calls still matters. Samsung responded to
Apple’s iPhone 5S A7 chip by saying it too was ready with a
64
bit processor. It pre-empted Apple with a wearable device – the Galaxy Gear
smart watch. And launched the new Note, having already launched 4 flagship S4
phones, its ATIQ range of tablets and laptops, and various low cost phones
during the year.
Samsung has created an entirely new pace of innovation in hardware, turning
technical novelty into a commodity that only it has mastered. To do that though
requires big calls on future technologies. Samsung took 10 years to develop
efficient production of
OLED, its display technology. The investments the company
makes are mind-boggling, dwarfing Apple and every other company I can think of.
It’s technology investment for 2012 were
$41
billion according to Reuters. OLED factories cost billions to set up and
run. Few companies will pony up – think Intel in its heyday. But investment
muscle is sometimes the only way to compete with an agile leader like Apple.
Leadership lesson? There is still scope for hardware
innovation but the commitments are huge, beyond the willingness of many western
business leaders. Bigger investment risks need to come back on the agenda.
3. Design is a commodity. Design has become a necessary but
not a sufficient ingredient of success. The
Samsung
Galaxy Gear is a design failure. The S4 is a success. But, as its
compatriot Hyundai has shown, it is possible to buy success simply because good
design skills are now freely available on the market. There is no longer any
excuse for design failure.
But Apple is showing us, ironically, that design is not so central as it was
when they launched the iPhone. The new 5s have the same form factor with a few
tweaks. More critical is the design of the overall package – the service experience
including what connectivity the service allows.
Leadership lesson? Companies can’t afford to overlook great
design but nor can they rely on it. Good leaders will be looking for the next
design advantage – integrating service, software, hardware and connection.
4. Charisma is no longer necessary. A development that is
difficult for some Apple observers to accept is that the company is going from
strength to strength without the charismatic leadership of
Steve
Jobs.
Tim Cook has done a great job at Apple, involving teams to
help him turn the tanker slowly around. Samsung is able to respond because of
its broad-based innovation capabilities. It can innovate across chips,
materials, displays, production processes, design, all with a view to
compensating for its lack of service skills. Those latter however have to be
put in place soon or Samsung will miss the value it is creating in its customer
base. Both companies are showing that large and growing
enterprises
are still relevant.
Leadership lesson? Innovation is a broadly based
skill set, far removed from the old days when a good product could meet a big
marketing budget and win markets. It’s no longer about charisma either but
finding more social ways to bring innovations through to market.
The short answer is we are learning about how the future of business is
being bedded-in by two extraordinary practitioners. The longer answer is we can
also learn a lot from the conflict between them:
1. Business is about the platform. Apple is no longer a
product business, despite the apparent dependency on the iPhone. It is a
platform business and its leadership lies in continuously developing the
potential of its platform. If you want an insight into Apple, look at the
iPhone 5S. Its major innovation is the A7 chip and what that does is open up a
new word of service – contextual computing for example, and interaction with
data rich services in monitoring, personal data, health data, location services
etc. Apple continues to win on profits because it has mastered, indeed is inventing,
platform and ecosystem business strategy.
Look at the form-factor of the iPhone and you see it is more or less
unchanged. The 5C has different colors but there is no underlying innovation to
go with them – no innovation in material to justify the superficial design
change. In fact the 5C is an anti-Ive product. A designer of Ive’s stature
should not slap color on a phone without some underlying justification like
making use of a ceramic or other innovative material. But that’s ok, because
Apple is innovating the platform and it has not been swayed by criticism of the
product. Thaat’s how it keeps Samsung at bay.
Leadership lesson? Leaders need total focus on
business transformation – from product to multiple services and revenue streams
built around platform and ecosystems where possible. It’s a really durable
competitive position to build.
2. Making the big calls still matters. Samsung responded to
Apple’s iPhone 5S A7 chip by saying it too was ready with a
64
bit processor. It pre-empted Apple with a wearable device – the Galaxy Gear
smart watch. And launched the new Note, having already launched 4 flagship S4
phones, its ATIQ range of tablets and laptops, and various low cost phones
during the year.
Samsung has created an entirely new pace of innovation in hardware, turning
technical novelty into a commodity that only it has mastered. To do that though
requires big calls on future technologies. Samsung took 10 years to develop
efficient production of
OLED, its display technology. The investments the company
makes are mind-boggling, dwarfing Apple and every other company I can think of.
It’s technology investment for 2012 were
$41
billion according to Reuters. OLED factories cost billions to set up and
run. Few companies will pony up – think Intel in its heyday. But investment
muscle is sometimes the only way to compete with an agile leader like Apple.
Leadership lesson? There is still scope for hardware
innovation but the commitments are huge, beyond the willingness of many western
business leaders. Bigger investment risks need to come back on the agenda.
3. Design is a commodity. Design has become a necessary but
not a sufficient ingredient of success. The
Samsung
Galaxy Gear is a design failure. The S4 is a success. But, as its
compatriot Hyundai has shown, it is possible to buy success simply because good
design skills are now freely available on the market. There is no longer any
excuse for design failure.
But Apple is showing us, ironically, that design is not so central as it was
when they launched the iPhone. The new 5s have the same form factor with a few
tweaks. More critical is the design of the overall package – the service
experience including what connectivity the service allows.
Leadership lesson? Companies can’t afford to overlook great
design but nor can they rely on it. Good leaders will be looking for the next
design advantage – integrating service, software, hardware and connection.
4. Charisma is no longer necessary. A development that is
difficult for some Apple observers to accept is that the company is going from
strength to strength without the charismatic leadership of
Steve
Jobs.
Tim Cook has done a great job at Apple, involving teams to
help him turn the tanker slowly around. Samsung is able to respond because of
its broad-based innovation capabilities. It can innovate across chips,
materials, displays, production processes, design, all with a view to
compensating for its lack of service skills. Those latter however have to be
put in place soon or Samsung will miss the value it is creating in its customer
base. Both companies are showing that large and growing
enterprises
are still relevant.
Leadership lesson? Innovation is a broadly based
skill set, far removed from the old days when a good product could meet a big
marketing budget and win markets. It’s no longer about charisma either but
finding more social ways to bring innovations through to market.
5. Lean is working. Big companies are also rushing failures
to market. Apple ad Samsung have both been there (Gear, some iOS7 features, and
Maps!). What’s interesting though is that these super-corporations are trying
to be nimble. Despite the wealth and leadership they want to do lean. Yet still
they don’t quite know how to set it up so they are not panned. Doing the right
PR around lean is a skill for both to learn.
Leadership lesson? The crowd, the customer base or the
ecosystem is essential to your decision making. Best to be explicit about it.
6. Narrow innovation rules. We don’t hear enough about how
innovation is changing but it is. Ever since Chris Andersen wrote The Long Tail
in 2004 narrow niche markets have become increasingly important. Smartphone
markets are shaped by the many narrow, self-electing markets of consumers who
buy apps. In effect a smartphone is a narrow innovation platform. But
smartphone markets are also changing. Behind Samsung and Apple a new generation
of niche suppliers is growing – read abut here
in this
Juniper report. The next generation of smartphones will nibble away at
Apple and Samsung market share in the hope or capturing some of the margin.
Leadership lesson? You have to combine the big vision for
your company with an appreciation of all the niches you now need to serve and
protect, and a narrow innovation strategy for doing it.
7. Today’s markets demand new decision processes.
Every corporate leader I talk to says the same. The rate of strategic
adaptation they face is mind-blowing.You can see at Apple and Samsung. Apple
incorporated innovations in Siri, iTunes Radio, iBeacons, multitasking, control
center, notifications and many more in iOS 7.
Samsung gave us 4 S4s and will soon launch a curved glass phone, which will
have involved hundreds of decisions on production line set up. These
innovations represent innovation after innovation – iTunes Radio alone involves
multiple decisions and negotiations on the business model and where to generate
and distribute revenues, and when (ads, downloads, song royalties). At the same
time Samsung has been trying to generate crowd ideas about future phones,
devolving some elements of decision making to its ecosystem.
If you are not revising your strategy monthly , seeking out advantage in new
niches, revisiting your core skills to see where you can find adjacencies,
seeking out new competencies so you can enter new markets, then your business
is at best a commodity one. But most companies are set up with old fashioned
hierarchy-based decision processes (or get hidebound and make no decisions).
Leadership lessons? You can’t just delegate decisions, you
need new decision models.
8. Be passionate without over-committing. Samsung remains a
key supplier of innovation to Apple, like the A7 chip. Apple and Samsung still
work together closely.
Leadership lesson? No amount of passion and commitment
should blind you to pragmatic decisions.
from irriri.blogspot.com
Your views are most welcome...
