Thursday, May 10, 2007
Industry Note: When Strategy Fails
"..."The Googles of the world, they are the Custer of the modern world. We are the Sioux nation," Time Warner Inc. Chief Executive Richard Parsons said, referring to the Civil War American general George Custer who was defeated by Native Americans in a battle dubbed "Custer's Last Stand"."
The irony is so rich it's almost lethal.
Who's advising Dick? With analogies like that, it sounds less like a consultancy, and more like Dick Cheney.
All we have to do now is wait for the "mission accomplished" moment.
Kidding aside, unfortunately for Dick, he's got it exactly backwards. From a strategic pov, Google is the one who is hyperflexible and capable of mounting quick yet disproportionately devastating forays into new markets and new value chain segments.
Finally, note the fact that if strategic thinking seems almost impossible for today's mediacos, that's because, well, for many, it is - they are trapped in an ever deepening value chasm.
"...Despite the attention from Wall Street, the media industry and the press, executives said the percentage of overall sales contributed by digital businesses remained small and they should be mindful of destroying existing lucrative businesses."
Mindful of destroying existing lucrative businesses? That's the largest reason why digital revenues fail to scale for big mediacos - and why Google (et al) never had the same problem.
"Mindful of destroying existing lucrative business," - The Innovators Dilemma lowers the innovation bar again...allowing the flexible garage guys to make hay.
Dick needs to read "The Starfish and the Spider" to see that other analogies regarding edge vs. centralized organizations using Native Americans and the US Army, that due to their decentralized nature Native Americans had been thriving in some areas of the US as late as the early 1900s to the disappointment of the US Army and their strategies. I don’t think it is Google that is Custard, it is “the Googles” as old media seem to be calling them (aka edge/new media/web 2.0). I think he is trying to play the sympathy card by putting this analogy backwards: “Poor us (old media) being attacked by a foreign entity.”