the
innovative LEDGER
An e-Newsletter from The Innovative Edge™ Inc.
Vol.
10, No. 1 - January 2010
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Is Microsoft the Information Age's GM?
By Jeff Govendo
Last
week I turned to the business section of the newspaper and there happened
to be, directly opposite each other, separate news items about Microsoft
and General Motors. For Microsoft, CEO Steve Ballmer was showing off
HP's new tablet PC, running Windows 7, which is about to go to market
(just ahead of Apple's much anticipated product). The GM story was
about possibly having to reinstate, by congressional mandate, hundreds
of dealerships slated to close as part of their recent re-structuring
out of bankruptcy.
While
the two stories had nothing in common, the two companies do. It
occurred to me that Microsoft may be to the Information Age what GM
was to the Industrial Age.
Both,
of course, are mammoth in size (no accident, my returning to the Ice
Age for a descriptor), and in their heyday absolutely dominated their
markets. In the 1950's and '60's, while Ford and Chrysler provided
spirited competition in a domestic market that all but excluded foreign
brands, GM was king. Their cars were big (all U.S. cars were),
bold and beautiful. They were distinctive -- you could easily tell
one brand from another. And they were loaded with innovations U.S.
automobiles were known for.
GM's
dominance was so complete, it was inconceivable they could ever fail.
Their spectacular slide over the years has been the subject of countless
analyses, too numerous to summarize. But for decades we've heard complaints
about unreasonable union demands, unsustainable legacy costs, unscrupulous
"dumping" (artificially lowballing of prices) by foreign
makers, unattainable mileage requirements, unnecessary pollution controls,
and many other explanations for losing their competitive edge.
Everything
except poor quality and lack of imagination in their products.
For years their strategy seemed to be to try to advertise, market
and rebate their way back to the top, all to little avail, as successive
generations of customers drifted to GM's competitors (mostly foreign).
Following
their near-death experience last year, GM shows signs of finally "getting
it", with cars of much higher quality and better design, as well
as the first plug-in electric close to debut. Is it too little too
late? We should find out fairly soon.
Microsoft
has reigned over its market even more completely than GM ever did.
Even now, with keener competition from other companies as well as
the emergence of newer technologies, Windows remains in use on the
overwhelming majority of PC's worldwide. And Windows 7 has generally
been well received.
But
Windows' dominance has never, in my opinion, rested on the strength
of its quality, design or inventiveness, but rather on business practices
that forced PC makers to sell it as part of their package. Customers
didn't choose Windows; it chose them.
For
a company so interwoven in the daily lives of both business and casual
users, I suspect there is fairly little brand loyalty. It's very
possible that if and when the PC is replaced by other types of devices
which are not locked into the Windows operating system, Microsoft's
journey may come to look an awful lot like GM's. It may, in fact,
already be happening .
The
lack of continuous improvement and innovation is not limited to prehistoric
critter-sized companies, though. Those in small businesses cannot
assume that simply because they are small, they're not subject to
many of the same dynamics that cause larger companies to rest on their
laurels, and calcify doing so. Success should rightfully be celebrated
and rewarded; it's a tough marketplace out there and those who succeed
deserve a pat on the back. But it should also serve as a signal
to keep moving ahead with fresh thinking on how to adapt, improve
and make substantial changes when necessary.
After
all, when is the last time you saw a woolly mammoth* walking around?
*Ironically,
recent news stories suggest scientists may be close to sequencing
the woolly mammoth genome. Some say it may actually be possible to
clone one in a few years! Could we do this with corporations?
