Today, I want to look at 2 short video clips.
The Lost Interview
This is a famous interview with Steve Jobs, believed lost for many years; if you want more information, imdb info is here. The interview itself is a long but great watch for anyone interested in the history of innovation and the tech markets. However, there is a short 2-minute clip on YouTube on innovation; if you have time for nothing else, watch this.
In the interview, Jobs explains that innovation dies in companies because they lock down a market, and then success is understood to be a matter purely of sales and marketing. Thus, the people who become promoted, whose opinions matter, and who eventually run the entire company, are those who can sell the current product or incremental improvements on it. A faster computer may help a computer company sell more, and thus be more successful, but a new phone or clothes washer is too far removed from their context.
As Ben Horowitz explained in “Wartime CEO/Peacetime CEO“, the right type of CEO for a company depends on its current environment. Similarly, it is eminently rational for a company that more or less owns its market, to focus on sales and marketing, promote sales and marketing types, and orient product around sales needs, primarily add-on products and incremental improvements.
Further, those companies, “executing on a known business model”, using Steve Blank’s terminology, know their markets and are just selling and delivering on it. The CFO and investor markets has gross and operating margin targets; significant investment in radically new areas will destroy those margins. Everything mitigates against promoting radical product people and for incremental sales and marketing people.
However, an almost inevitable corollary is that true innovation will wither in such companies. Of course, this is somewhat shortsighted, since eventually someone will come along to change the entire status quo, leaving the company to wonder why, with all of its resources, it couldn’t head them off.
Raiders of the Lost Ark
The same idea comes to play in any large organization, especially governments, brilliantly portrayed in the closing scene of Raiders of the Lost Ark. The Ark, source of unspeakable power, is not just a threat to the Axis Powers in WWII; it is disruptive and frightening to the organization that finally secures it: the US government. The people in position of authority feel much safer simply saying, “top men”, and then burying the Ark in an enormous warehouse, hopefully never to be found again. The organization hires and promotes those types of people, the incrementalists.
As in the Lost Interview, as in the Lost Ark, people who help a well-established organization maintain its status quo, along with incremental improvements, will be hired, promoted and eventually run the organizations, while those who truly want to change it will suffer the Lost Promotion.
Is there hope? Sure there is. Innovative product people really only can thrive in 2 situations, and should seek them out:
- Startups: companies that want to change the world, whose very existence depends upon radical change.
- Troubled companies: Eventually, even the strongest monopolist falls prey to nimble competitors. If the company recognizes the need to change and compete, to radically restructure itself, then, and only then, is it ready for the product innovator.
Nothing wrong with being either type; just know where you fit.