Thursday, February 10, 2011

Journey to the West

or Live Free or Die

An intersection of high technology, the pioneer spirit, the book Journey to the East, and leadership.

Is your company destined to die? This will be the case if you can’t free yourself from the legacy of your products.The moment new features are released into the market place they start to loose value. For every feature added to a platform, the cost of maintenance increases.


It is inevitable that the cost of sustaining the product’s value will eventually rob all resources from the company’s ability to improve the product’s value.

Imagine a wagon train heading west. As the train gathers it travels from town to town picking up more wagons. The train slows down as it can only travel as fast as the slowest wagon. As the train gets larger, options for paths are eliminated. The train needs to make sure the road and bridges traveled are strong enough. Each wagon joining the train will bring a spare wheel for itself. Once their are enough wagons, it make economic sense to trade the spare wheels for the services of a blacksmith who could build or rebuild wheels as necessary. Would anyone trust the blacksmith enough to sacrifice their own spare? Will the leaders notice someone building a railroad to their destination? The train will pass through suitable valleys where some members could settle. If this is not the intended destination, would the leadership allow the train to be split apart?


The responsibility of leadership is to ensure the company is adapting for the future and not getting mired in the past.


The original capabilities become the legacy of the company. Can your company break out to a new legacy?

One easy way to achieve this is to listen. Listen to your customers, markets, board, and employees. Through these sources, you can identify opportunities for significant growth. Don’t just pick good sounding ideas, however. Look for new opportunities that offer a path for your legacy. These opportunities should be new and exciting. They should be significant e.g. from a 20% - 200% growth opportunity. They should be horizontally or vertically integrated with your old legacy, i.e. a bridge rather then a leap. The means to finding these is to take a consultative approach with clients and vendors. With great delivery and a consultative approach creating satisfied customers, you will naturally be asked for more. This means more opportunities for you to pick from. With the old legacy and new energy, you will have a new legacy.

This still allows for white space filling. Filling white space is a valuable endeavor but should not be the plan for significant growth. Filling white space allows a company to present themselves as a complete package to the market place and not just a collection of tools. Whenever the company makes a significant move into a new market space, it automatically creates white space. This should be planned for and accommodated, i.e. managed, but not become the focus of the next step. Taking the the next step and making sure it is significant is the responsibility of leadership.

There will also be the opportunity for significant divestiture. Once a company enters a market, they can trust that there will soon be significant competition. Some of these competitors will figure out how to commoditize the product and hence start a demand for a low cost alternative. This is an obvious signal that the company needs to free themselves or die, but this signal comes too late. If leadership has done their work; however, this step is anticipated and there is a smooth transition from relying on the original, home grown product to establishing themselves as a customer of the old market.

Imagine your company always on a journey to the west. It would gather pioneers along the way. It would have pathfinders looking for the optimal routes. Occasionally and with happy fellowship, portions would break off and establish communities that would serve as supply and industrial centers, not only for your own company but others as well. Every now and then new technology would replace the old. As long as the leaders can sustain the journey, the company will have a history of legacies. Otherwise, their legacy will become the epitaph on the last tombstone on a trail that ends.

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