Tuesday, August 2, 2011

Core Competencies and Innovation

True and false. True in the sense that companies got challenges from where they least expected, for instance Cannon was expecting the competition from Nikon not from Iphone and other smart phones. Similarly,  Google started with search engine but now it is in advertisement.  However there are numerous companies which fall victim to the direction less innovation, for instance Time Warner & CISCO.  The core competencies are crucial but one need to redefine the core competencies, Apple and Google defined  these very well and they are miraculously stick to it. The Apple's core competencies is  making elegant products.  Google's core competencies is still a search engine. Amazon's core competencies is providing effective online e-commerce platform, although they started with selling  books. Jeff Bezos main aim was not selling  books but creating an e-commerce platform. Borders Books wrapped-up the business so the question is , did they stick to core competency?  I suppose no they should be into selling books but they failed to embrace new medium to sell books. Similar, blockbuster and other businesses  did their mistakes.

This is very true that paradigm has been shifted, the environment is very conducive for the innovation where  a high school dropout from garage challenge a 100 year old behemoth.  I found Andy Groove's work in "Only Paranoid Survives" is very relevant in defining new ecosystem which infuse 10X factor.  Companies need to pass through strategic Inflection points as many a times there are mega trends which jolts existing conventions and write new rules of the game. We still follow same old  rules which has been set by nature, for instance moving tectonic plates formed continents, mountains like Himalayas and makes the world constantly moving.

Similarly, current business environment also consist of many moving parts.  It is extremely easy to handle the constant change for the smaller, nimble companies but tough to handle for giants, otherwise CISCO is a fine example how blind path innovation leads to stumbling. Even I confuses now that what is their core competency.
Core competency is must but it should be defined well and time-to-time look for inflection points.
There are two constant in the universe, first is God( if you are believer) and the second is "the Change".

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